The Dilemma: To Buy Or Not To Buy

The market seems to be precariously placed at current levels, waiting to move either way. While valuations are undoubtedly attractive, the prospect of getting them even cheaper is restraining buyers from making any purchases in a hurry.

For one, players say that the yuan and political trouble still continue to cast a shadow over the bourse. However, they add that there have been numerous instances when the indices have staged a come back despite a plethora of bad news. The trend is so confusing that very few players are willing to come on record and say that the markets have bottomed out, though most of them feel that way.

 

Manic Monday

A leading US-based value-investor fund, which has been cleaning its portfolio of-late, is reported to have sold around 80,000 shares of Gujarat Ambuja Cements Ltd (GACL) and around 35,000 shares of Gujarat Gas on Monday.

Foreign funds sold between 2.5 -3 lakh shares of the Dr Reddy's scrip on Monday, which included a single seller of about 1.35 lakh shares.

More than institutional selling, it was speculative unwinding that had caused a slide in Dr Reddy's scrip prices on Monday. Following the company's clarification that it would not be really hit by the weakening rouble, short sellers scrambled to cover their positions, which prevented a further slide in prices.

The Nestle scrip too moved up yesterday in a weak market, mainly on short covering.

Among key index-based scrips, MTNL bore the brunt of a leading UK-based fund's selling. The fund is believed to have offloaded close to 4 lakh shares. Heavy selling from foreign funds was also witnessed at the Bhel counter though the exact quantities could not be confirmed.

Among second line stocks, the Ranbaxy scrip continued to be pounded with around 75,000 shares being unloaded between different brokerages. Other stocks on the hit list included HPCL (around 50,000 shares) and ICICI (around 1 lakh shares).

A US-based brokerage is reported to have sold aroundwever, it could not be confirmed whether the order was on behalf of a local or foreign fund.

The Bajaj Auto and Pentafour Software scrips attracted some token buying interest. A European brokerage is reported to have picked up around 70,000 shares of Bajaj Auto while two FII brokerages mopped up around 60,000 Pentafour shares. Both these counters continued to witness institutional buying interest yesterday which was reflected in their prices.

The Unit Trust of India was an aggressive buyer in Indian Hotels and EIH. It is reported to have purchased around 1 lakh shares of each. It is also reported to have purchased nearly 1.25 lakh shares of Glaxo, 25,000 shares of Infosys and 20,000 shares of the Aptech scrip. Life Insurance Corporation, on the other hand, was aggressively purchasing refinery stocks -- 20,000 shares of IOC, 25,000 shares of HPCL and nearly 20,000 shares of BPCL.

The main casualties of yesterday's FII sell-off to the tune of nearly Rs 100 crore were Reliance Industries, HPCL and MTNL.

Around 30-35,000 shares of Hindalco scrip were also dumped by a leading fund yesterday which has been a regular seller at the counter for some time now.

Tail piece

Market players feel that the 2810 mark is a very crucial mark for the Sensex today. In case the Sensex closes below this mark, players feel it could slide all the way to 2700. If it manages to close above this level, one could witness a short-term correction, they add.