Vicious Circle

The drop in volumes is having a cascading effect on market sentiment, with prices too wilting in the absence of buying support.

Volumes have been declining since players are putting off fresh purchases. They expect a better opportunity to crop up at more attractive valuations following the introduction of rolling settlement.

Thus, with every passing day, the markets are getting lacklusture and trader interest gradually declining.

Falling in line

Reliance Industries, which managed to buck the trend of the market for the past few days, fell today as Big Daddy and Cleanson brokerage sold 3 lakh and about 5 lakh shares, respectively.

The speciality of this counter seems to be its ability to move in a different direction from the rest of the market.

It managed to hold its own the whole of last week when the rest of the market started collapsing but today when the broader market gave a technical pull back, the stock gave way.

Universal flavour

Universal Banking it now transpires was the firm which picked up slightly under a couple of lakh shares of Infosys yesterday and which is responsible for keeping the stock fairly buoyant.

The new developments in the company with its tie up to form a joint venture is being seen as the ability of the company to spring up surprises which no one expects.

Although the management had given an extremely conservative estimate about its performance in the current year, analysts are of the view that internally the management is formulating a game plan which would see the company beating its own estimates.

It is for this reason that analysts are keeping a very close eye on every development of the company and is on the look out for any development that could force an upward re-rating of the stock.

Conventional Banking

King Kong brokerage picked up 6 lakh shares of State Bank of India today. Most broking firms including Uncle Jam and the Pearl brokerage had upgraded the State Bank of India and given the stock 12-month price target in the region of Rs 270.

Assuming these target prices would be met, the current prices offer a decent risk reward ratio for funds to step in at buy. At Rs 210 levels the downside to the stock is extremely restricted due to the inherent strengths of the bank and provides a safe investment option specially in a time like this.