Elections To Hold Sensex Steady At 3400-Levels

The on-going election process has slowed down trading activity in the market as the sentiment continues to remain sluggish.

According to brokers, the market is expected to hover around 3400-levels during the next week.

The badla trading on Saturday took place at a very high average rate of 21 per cent. It had also shot up to 24 per cent at one stage, brokers said.

The market witnessed a reasonably higher badla yesterday. There are many open positions in stocks like Mahanagar Telephone Nigam Ltd (MTNL), Grasim and Pfizer, says Nailesh Dalal, director, Dalal & Broacha.

Brokers say that the MTNL stock witnessed a backwardation charge of Rs 10.

 

Stocks like MTNL, Grasim and Pfizer would be the counters to watch during the next week as the backwardation charges in them indicate short positions. While Grasim is said to have been in an oversold position, Pfizer has witnessed FII purchases.

This would result in more speculative buying in the stock, a leading Bombay Stock Exchange (BSE) broker said.

Analysts also point out to the positive trend in the foreign investment flow.

This has resulted in speculators concentrating on small cap B2 stocks and those stocks which have been shifted from the B1 group to the A group.

Operators have commenced warehousing of shares due to two reasons. First is the fact that foreign institutional investors have commenced positive investment in the market.

Second is the shift of 50 scrips from B group to A group announced by BSE from Monday which has also resulted in punters piling up these stocks.

This leads to more speculation in unknown B group stocks, commented a dealer at a leading institutional brokerage.

The market witnessed lot of volatility during mid week on rumours that US had launched an air strike on Iraq.

Nervous players unwound their positions leading to fluctuations in the prices of key index stocks.

There is apprehension in the market about the developments in the Gulf.

With the market generally lacklustre in absence of any buying support, the Gulf factor will continue to be a key factor in determining the sentiment at the bourses this week," says Bharat Dalal, BSE broker.