Players Sceptical Of Rapid Recovery

The broking community is of the opinion that softening call rates, slowdown in FII sales and select buying by foreign funds will not prop up the market.

The general feeling in broking circles is one of cautious optimism given the uncertainties prevailing in the market.

Also, the BJP posturing in its election manifesto as regards their policy towards foreign investment has not helped make things easy. The only silver lining is the fact that marketmen do not see any sharp downtrend at the bourses this week.

The general consensus is that there has been a marginal improvement in trading sentiment over the past week. But whether the improvement will translate into an actual recovery remains to be seen.

 

"There has been a marked improvement in trading sentiment over the past week. For one, the kind of aggressive selling from FIIs witnessed a couple of weeks back has subsided. Secondly, FIIs have also been buyers at select counters, especially index stocks. It is difficult to predict the band in which the market will be moving in the next few weeks. However there is unlikely to be any major slide till the elections are over," says Hemendra R Sheth, BSE broker.

The Reliance and ITC scrips, on an average, attracted an undha badla of Rs 1.50 and Rs 2 respectively. Technically, this indicates a shortage of shares at these two counters which could lead to a minor rally next week. However, marketmen are pessimistic about counters witnessing a minor rally.

"With the bonus shares of Reliance expected to trickle into the market over the next couple of weeks, the scrip should continued to remain subdued," said a leading broker.

FIIs were reported to be buyers at counters like ITC, Tata Tea, Castrol, Bajaj Auto and HLL. However, very few players see this as a turnaround in trading sentiment. "There is no clear trend in the market at the moment. It is not as if foreign funds have done a major rethink on their India strategy. The buying interest seems to be few and scattered. The market will remain lacklustre and rangebound at current levels next week. A rally of more than 40-50 points seems unlikely at this stage," says Sanjeev Sanghvi, head of dealing, HSBC B&K Securities.

"There are good index-based stocks available at very attractive valuations at current levels. However, most of the funds are taking a view on the region or country as a whole due to the turmoil in South East Asia," said a source at an FII brokerage.