Market Trades In A Narrow Range

fodder scam and create a bearish sentiment.

The week started with a slide in equity prices as Gujral confirmed that a petro-hike was inevitable. The sensex opened with a downside gap and slipped to 3756.78 points losing 1.42 per cent from its Friday closing of 3801.71 points. The Nifty lost 1.36 per cent to close on Monday at 1045.50 points, down 14.5 points from Friday's levels of 1069.

UTI was reputedly a large seller as it is raising funds to settle redemption calls. Hero Honda bucked the downtrend to hit the first of several successive 52 week highs.

Oil stocks such as HPCL, Cochin Refineries and BPCL witnessed investment buying. The Bank of India scrip was listed and saw much interest which also continued through the week because of its excellent results.

Tuesday witnessed a comeback for the pivotals in brighter trading at both the NSE and the BSE. The Sensex ended at 3781.43 points while the Nifty rose marginally to 1048.40 points. The interest was mainly due to settlement considerations on the NSE. Three main pivotals SBI, ITC and Reliance all saw rises as did TVS Suzuki.

On Wednesday, Stock prices reacted again on lacklustre trading as FIIs stayed on the sidelines and domestic FIs indulged in some profit-taking. The disappointing working results of Grasim, Century Textiles and Hindalco among other large Birla-group scrips, induced a gloomy atmosphere while the market has still not fully discounted the impact of an inevitable petro-hike.

Mirroring the mood, the Sensex dipped to 3753.50 while the Nifty was held at 1044.40. Amidst all this, Bank of India hit the circuit-breaker after frenzied buying while other bank stocks such as Global Trust and ICICI saw buying interest.

On Thursday, the Nifty closed at 1054.05 which was a cosmetic gain. It came on subdued trading in the absence of action on the BSE which was closed on account of Shivaji Jayanti. ACC and Gujarat Ambuja saw losses while Tata Tea and IFCI registered gains. Hero Honda saw continued buying interest from FIIs.

Friday featured mixed sentiments for the NSE saw a slight decline in stock prices while the BSE saw marginal gains.

The Sensex ended on 3769.34 points while the NIfty lost a little ground at 1053.35 points. Century Textile and Bajaj Auto lost heavily in bear -hammering while SBI and Bhel rose slightly amongst the forward list. Hero Honda registered sharp gains and registered new high for the fourth day in succession.

The Sensex ended the week down 0.86 per cent while the Nifty lost 1.47 per cent. The Dollex and BSE 200 went down 0.43 per cent and 0.10 per cent respectively. The Rupee remain-ed quite firm against the dollar.

The market remains evenly poised in the intermediate term. The long term trend appears to be up although there is distinct nervousness about the political stability of this government. The imminent passing of the Finance

Bill should also be taken as a positive factor.

The short term appears to be showing a negative trend with the market finding support close to the criticaL 3750 level. There is a lot of support in this area and if it is breached the Sensex could slide to 3630 points before finding secondary support. There is upside resistance at just above the 3800 point levels. If that support is breached the Sensex would complete a bullish saucer pattern and have an intermediate term target of 4100 points.

But, trading volumes were very low this week and the Advance -Decline ratios were also negative at 565 shares up versus 925 shares down and 157shares holding their values. Since trading volumes and breadth indicators are both showing negative signals it is possible that this upside resistance will not be breached immediately. Thus the Sensex could seesaw in a narrow range for some time. That appears the likeliest occurence but the longterm prognosis looks fairly good.