Strong Us Close Provides Leg-Up

The firm overnight closing on the US markets helped sustain the momentum at the local level. Whether one likes it or not global markets would continue to look at the Nasdaq as far as the ICE (information technology, communications, entertainment) sector is concerned because that's where the innovations are.

Genomics and biotechnology have not yet made their presence felt here, but one could expect the players to be a more circumspect lot now that they have burnt their fingers in the ICE craze.

But then, old habits die hard and one should not be surprised if the herd instinct makes them do silly things again.

 

Uncle Sam in reverse gear

The more things change, the more they remain the same. Having not had a very pleasant experience with the ICE sector , Uncle Sam seems to be adopting the safer route of latching on to traditional brick and mortar companies. The rationale been cited is that the downside in Old Economy stocks should be minimal considering the fact that the economy as a whole is growing at a healthy pace of 6-8 per cent. Armed with this reasoning the fund has accumulated shares of cement majors Larsen & Toubro and Gujarat Ambuja, as also Tata Power , Telco and Carrier Aircon. At last count the quantities purchased in each of them is believed to be in the 50,000-1,00,000 shares range. This has helped in the revival of interest in Old Economy counters.

Time for futures

With the cash market witnessing lacklustre activity, the regulator has decided to kickstart the futures segment. It would be interesting to observe what participants think about the future. What can be said with a certain level of confidence is that the futures products would hopefully give more warning signals in advance.

Moreover, futures on indices should provide more opportunities for taking view-based positions. What the volatility of the past few months had done was make most players into day-traders.

Digitising the future

Of late, the Digital counter is attracting speculators and serious investors alike.

While most fund managers say that bottom-up approach is what they believe in, at times, taking a view on the market as a whole assumes importance. Savvy, who is known to be a believer in both approaches, is following an interesting strategy of lapping up Digital shares at every decline.

With the markets showing no firm trend, he has restricted his appetite to half a million shares does far.

Volatility spreads

First it was the equity markets and now the virus seems to have spread to the foreign exchange markets. The inter-connectedness of the global markets was in full reflection this week and the rupee's tumble against the dollar thus became a matter of `when'. Some cheer for the local currency comes from the fact that Wednesday's figures reveal a fair degree of buying by foreign institutional investors.

...software cos smile

While the tumbling rupee brings a fresh round of worries to the importers, most software service companies who are foreign exchange earners can rejoice at the prospect of more profits to their bottomlines.

This should enable a greater level of clarity on where fund managers need to make allocations.

While Satyam has been slipping, an institutional investor has been using it as an excellent opportunity to pick up the stock.

Over the last two days this institution has bought 1,00,000 shares of Satyam through the Jordan brokerage.