Beginning Of A New Cycle
A new week and an opportune time for a new beginning. Those who were sitting on the fence in the brief past got active yesterday.
There was plenty of action both ways and that's what made the events more interesting.
There was some amount of fund-based buying and as usual it was the early riser who had reason to rejoice. However, the sustainability of the rally is subject to question. The fact that some stocks which were weak early on in the day revived does not help in clearing matters. In this environment it needs to be reiterated that one should restrict oneself to the best picks within an industry.
The sector debate..
During the early part of this calendar year, most funds had their corpuses heavily skewed towards ICE (Information technology, communications and entertainment) stocks.
However, the dramatic meltdown of the last two months caught many of the funds by surprise. This has created a situation in which even aggressive fund managers are treading a more cautious path this time around.
A reflection of this mindset is that the tried and trusted fast moving consumer foods, pharma and cyclicals are attracting some attention.
Fresh thinking
Uncle Sam was among the first funds to reflect this changed mindset. It initially started off with cement stocks and there has being no looking back since then.
At last count, the fund is believed to have accumulated half a million shares of Grasim and close to 3,00,000 shares of Gujarat Ambuja and Carrier Aircon.
With the market in a trading zone, stocks which offer even a 20 per cent price run are highly touted. Among the stocks believed to offer such an opportunity is Reliance and this seems to have prompted Savvy to lap up the same. Savvy is believed to have accumulated a million shares of Reliance over the last two trading sessions. Another scrip talked about in the same breadth is ITC.
There was buying of 1,00,000 shares in ITC by the Open-hire-me Fund.
Not to be left behind
However, the ICE counters have not been dumped, but the amount of selectivity has increased.
The drama at the Satyam counter continued though buying emerged as the day progressed. The broking outfits on the buy side yesterday were the Dutch Brokerage, Uncle Jam and Jordan Brokerage. While Dutch Brokerage restricted itself to a buy of 40,000 shares, Uncle Jam was more aggressive and bought 1,50,000 shares of Satyam yesterday. Uncle Jam was pretty aggressive even yesterday and a further 1,50,000 shares of NIIT were added as a part of its buying spree.
State of flux
With no clear perspective emerging, the broad market continues to be in a state of flux. A reflection of this phenomenon is that though the broad indices are looking up. At individual stock specific level, the movement is limited to a certain trading zone. There is no secular pattern which tends to confirm the feeling, that caution continues to be great importance. Though the downside from these levels appear limited any dramatic upward spiral within a relatively short span also appears unlikely.
Changing times
A reflection of the changing times is that people who were talking about certain stocks as multi-baggers are thrilled if the same stocks offer an exit at even an appreciation of 10-20 per cent. It is probably this mindset which makes sellers appear at every rise and acts as a dampener to those hoping for a secular trend in prices. A true reflection of the changing times is that our volatile indices would be available on foreign shores to fulfill the insatiable appetite of the global speculator.