April 28, 2007
Caution Brings Volatility Back
to Indian Markets
Mumbai
Even though a key Indian share market index breached the
14,000-point mark for the first time since Feb 22, volatility
returned during the week ended Friday as sentiments were weakened by
worries over inflation and the general performance of other markets.
In the ensuing sessions, analysts do not foresee any major change in
sentiments, but say some stocks may perform well on the back of
robust corporate results for the last quarter for 2006-07 fiscal,
ended March 31.
"Essentially what we saw during the week, especially Friday, was a
major bout of profit taking after some major gains over the past
nine sessions. What prevented a correction earlier was excellent
results from bluechips," said an analyst.
"In the ensuing sessions, too, we don't expect any major changes in
the market movement as investors are not expected to make any fresh
commitments in their existing portfolios," the analyst, who work
with a leading brokerage, added.
During the week, the sensitive index (Sensex) of the Bombay Stock
Exchange ended marginally higher by 11.17 percent, or 0.08 percent,
at 13,908.58 points, after breaching the 14,000 mark during
intra-day trading Monday.
The major reason for the marginalized increase, despite a rise in
the index for four out of the five trading sessions, was the drop of
320.30 points, or 2.25 percent Friday, when the key index closed at
13,908.58 points.
The robust results reported by Reliance Industries and Bharti Airtel
had little effect. Nevertheless, the Sensex was still ruling at a
healthy 1,025 points, or 7.95 percent, over the past month, data
available with the exchanged showed.
The market had started on a positive note Monday, when the Sensex
gained 30.92 points, or 0.22 percent, over the previous day's close
at 13,897.41 points - but not before touching an intra-day high of
14,046.52 points.
With the Reserve Bank of India (RBI) keeping key rates unchanged in
its monetary and credit policy for 2007-08, the barometer index rose
208.39 points, or 1.5 percent Tuesday at 14,136.72 points.
The markets were up once again Wednesday by 81.05 points, or 0.57
percent, at 14,217.7 points, followed by a marginal rise of 11.11
points, or 0.08 percent Thursday, before Friday's crash.
Data available with the markets watchdog Securities and Exchange
Board of India showed that foreign institutional investors (FIIs)
were net buyers to the extent of $568.5 million during the week
under review.
The only day when they were net sellers was on Tuesday when they
sold equities worth $15.60 million. Even domestic funds remained net
buyers on each of the five trading days, the data showed.
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