Fed Meet Casts Its Shadow

Further, all eyes are on the US Federal Reserve chairman Alan Greenspan who is expected to leave interest rates untouched at the meet today. However, a section of the market feels that the Fed may still raise interest rates by about a quarter percentage since it would be the last chance to do so before the Presidential elections in the US. If this happens it would be a temporary setback for the market and the bulls must be keeping their fingers crossed.

Zee show goes on.

Zee continued to be in the limelight and closed at the upper end of the circuit filter on widespread buying. The Clean Son brokerage is reported to have bought 5 lakh shares for one of its local clients. Jordan Flaming brokerage bought about 4 lakh shares, while Numero Uno bought about a lakh and a half shares for a couple of its clients.

 

A silver lining.

The Savvy fund manager seems to have suddenly turned bullish on the Silverline counter and has picked up about half a million shares across various brokerages. The firm trend of the scrip on the NYSE may have had some role to play in the sharp appreciation in the price in the past few days. But it is still unclear if it is a case of the dog wagging the tail or vice versa.

Up in smoke.

The ITC scrip saw a selling of about 3 lakh shares, though the identity of the seller could not be confirmed. The stock was one of the weakest counters in a market full of gainers. At best the stock seems to be a contrarian buy, but no buyer with a firm conviction is seen around. Every rise is always met with selling from some quarter or the other, and there seems to be no shortage of supply in spite of all the valuation logic given to justify a buy on the stock.

ICE refuses to melt

Software stocks remained firm and boosted sentiment with buying in counters like Infosys Technologies, Satyam Computers and Pentamedia Graphics. About 30000 shares of Infosys was picked up, though the stock was unable to hold on to its early gains. It opened at the upper end of the circuit filter after a strong showing on Nasdaq where it had moved up about 22 dollars per ADR, about 16 per cent.

Uncle Sam is also reported to have picked up about 3 lakh shares of Satyam, while Savvy fund manager and Prudent fund have again found Pentamedia Graphics an attractive buy.

A few pointers...

There is a feeling that good days are back. The prevailing feeling is that there is some more steam left in the rally. One therefore needs to understand that to a large extent price triggers are set into play depending on the prevailing liquidity. For the past two weeks, funds have entered the system through the FII route and enabled a sharp bounce back in several key counters.

Note of caution.

With oil prices on the rise there is a high likelihood of inflation raising its ugly head. This will again lead to a situation where cyclical stocks will bear the brunt. Hence, there is an opinion that only select sectors and not the entire market will participate in a rally.