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Jayanta Mallick

LAST week, the BSE Sensex improved by 3.92 per cent, while the S&P CNX Nifty gained 4.9 per cent. According to technical analysts, the Sensex took support from 4120 points level, which could be viewed as the floor if the current short-term upward trend has to continue. The next resistance seems to be around 4600 level and the immediate support level appears to be at around 4250 points on the benchmark index.

The long-term Sensex continues to remain positive. The volume and breadth indicators, however, suggested slight exhaustion at the end of the week.

This week, the market may not be as volatile as it was last week. If there is no strong negative news, the likely scenario for this week is that the key indices may take a pause, but close in the green on sheer liquidity play.

There is no reason to paint too optimistic a picture for the week even though the short-term phase of correction and hectic activity around the derivatives contract expiry is over.

The rebound in the benchmark index last week may have placed the market in a higher plateau. However, till the beginning of the second quarter result season later in October, the market may not like to be hyper active.

The scheduled meeting of the Cabinet Committee on Divestment this week on the imbroglio over HPCL and BPCL is unlikely to throw up any dramatic solution. The stock market has discounted a possible delay of six to nine months for the disinvestment of the oil PSUs.

As a welcome step for the retail investors, the Bombay Stock Exchange stymied price manipulations by a set of market operators in nine stocks by shifting them to the trade-to-trade segment with effect from September 26. After the BSE announcement, the stocks slumped. The degree of decline on last Friday in these counters varied between 11 and 35 per cent.

The other important price-influencing event was the hike in the FDI limit in telecom to 74 per cent from 49 per cent. This decision by the Group of Ministers (along with a decision to allow of intra-circle merger) is likely to provide trigger for the telecom stocks this week.

In the F&O segment, four new stocks - Arvind Mills, GAIL India, IOC and Syndicate Bank — made a decent debut on last Friday. (In Syndicate Bank, the derivatives volume was 1.5 times that of in the cash segment).

Following the September contract expiry, the total open interest in the segment came down by 37 per cent against 35 per cent in the last month. Implied volatility in Nifty options has come down after the near month contract expiry. Implied volatility of 1390 call and put stands around 24.5 and 26.3 per cent.

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