Poor Corporate Show Dampens Sentiment

Stock markets reacted with cautious optimism to the rather dismal corporate performance last week. With the political situation inching towards normalcy, the markets looked forward to the corporate results, which could have boosted the sagging morale of the capital market.

While the BSE Sensex closed at 3759.64 points, losing 9.7 points compared with the previous Friday's close of 3769.34 points, the Nifty lost 5.93 points, to close at 1048.40 points against the previous week's close of 1053.33 points. According to market sources, the stock markets would have moved up significantly had the corporate results been more encouraging.

Unfortunately, what we saw was only an average corporate performance. Taking this into account, the performance of stock market looks pretty good, said a Mumbai-based analyst at an FII brokerage. The market also remained on tenterhooks because of rumours of the petroleum products price hike.

 

This was another reason why the trading sentiment remained dull. However, the market seems to have discounted this news. Probably, this was one reason why the market looked firm during the previous week, despite the rumours of a petro hike, said a leading BSE broker. The trading volumes in the B group scrips continued to surge for the second week in a row. This is a healthy trend. The main reason why the activity has shifted to the B group is because the prices of A group scrips have reached their saturation levels, said a research analyst.

Meanwhile, the FII interest in some cheaper Indian stock continues unabated. According to market sources, the FIIs were very active in certain select counters in the B group. In the last two trading days, the price of ITC scrip moved up significantly on account of heavy FII buying coupled with speculative buying by punters.

The scrip closed at Rs 442 at the BSE on Friday against Monday's close of Rs 399.50. While at the NSE, the scrip closed at Rs 438.60 on Friday against the Monday's close of Rs 399.65.

The other scrip which hogged the limelight during the past week was Reckitt & Coleman.

NEW DELHI: Expectations among the operators that some of the big companies would show good results in their annual reports helped the Delhi Stock Exchange (DSE) to shed its recent declining trend during the week ended May 16. The DSE Index (base 1983) went up by 7.95 points to settle at 779.87 during the week as against the previous week's close of 771.92 points. While adverse expectations about the annual reports of some of the big companies outweighed the passing of the budget by the Lok Sabha preventing the market from rising during the last week, contrary anticipations cheered up the market this week.

High expectations, particularly about the annual reports of tobacco major ITC Ltd and Telco, resulted in an optimistic sentiment in the market, analysts said. The ITC board will be meeting on Tuesday to disclose its annual report. Also, a decision by two-wheeler major Bajaj Auto to consider bonus issue in the board meeting next Monday and disclosure of good results on Wednesday sharpened the upward trend. Domestic operators were bullish and there were reports of a similar mood among foreign institutional investors during the week.

CALCUTTA: Depicting an easier trend in the first half of the session, selected scrips on the Calcutta Stock Exchange recovered to close with handsome gains during the week ended May 16. The recovery trend continued on the last day of the settlement prompted by hectic squaring-up operations coupled with a spurt in FII and financial institutions support for select counters. A temporary reprieve from the imminent petroleum price hike after a meeting of the United Front government aided the uptrend, marketmen said. Reflecting the divergent trend, the CSE Index resumed at 106.22 points and declined to touch a low of 104.98 points on Wednesday but recovered sharply during the last two days of the week to close at 107.10 points.