The Hindu Business Line : Sensex begins `new year' by touching 6,000 level

THE stock markets welcomed Samvat 2061 on a note of determination, with the Sensex touching 6,000 at the opening of Moorat trading on the BSE on Friday. However, the index could not be sustained at this level, and the 90-minute truncated trading day closed with the index almost flat.

When the markets opened at 5.30 p.m, the Sensex zoomed to touch 6,001.99 barely minutes into the opening bell. Almost immediately, the index moved southwards, hovering around 5,980 levels. Trading ended with the Sensex up 9.70 points at 5,964.01.

On the NSE, the Nifty demonstrated a similar pattern, touching the day's high of 1,884.75 within two minutes and 10 seconds of trading. The index could not uphold this level for over two minutes and dipped below 1,880. The index closed the session at 1,872.95, up two points.

Mid-cap stocks continued to outperform the main indices in both the markets. Volumes and closing gains posted at the end of the day in mid-cap stocks were significantly higher than blue chips and other market heavyweights.

The NSE's CNX Midcap 200 touched a high of 2,160.20 before closing at 2,155.25.

Trading movements on Friday reflected the contradictions in the market, with sentiment yo-yoing between exuberance and caution. Brokers and analysts seem divided about the direction the market would take, with some predicting levels over 7,500 and others cautioning that it would be a while before the Sensex closes firmly over the 6,000 mark.

"We are extremely bullish about the market. Even though there would be hiccups, our expectation is that the Sensex will touch 7,500 by April 2005. This expectation is based on technical theory as well as a measurement of the sentiment," said Mr Chandresh Kampani, Jamnadas Moraarjee Securities.

However, several analysts are of the opinion that unless there are fundamental changes the markets would find it difficult to trudge upwards from the current level.

"This is fairly evident even in the last few days of trading, where the index has been straining to touch 6,000, and even if it does touch the level, it cannot seem to sustain it," said an analyst with an institutional broking firm.

Going into the next year of trading, there is overall bullishness in the market, even though this is tempered with a lot of caution.

Mr Mitesh Shah, NSE broker, said: "The market will certainly see momentum. The next few weeks could be range-bound as FIIs and mutual funds would book year-end profits and churn their portfolios as well, before the end of the calendar year.

"The medium term certainly looks bullish."

Steel, cement, IT and banking sectors continue to be in favour with market participants.

"We are bullish on refinery, chemical, oil and gas, steel and banking scrips. IT scrips are not on our buy list yet.

"When the index touches 6,500, we would be putting IT scrips on our sell list," said Mr Kampani.

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