Mkts trade lackluster with low volumes, no conviction

By Udayan Mukherjee, CNBC-TV18

It was a bit of a nothing kind of day on such low volumes. The market tossed around a little bit. It was a bit soft in the morning, a bit better in the afternoon but finally closed absolutely flat. The Nifty was 10 points down and the Sensex was down about 140. So, what looked like a promising reversal rally building up in the middle of the day did not quite hold out. The weakness came back at about 4,100 on the Nifty and engulfed all the gains that were posted. So, net-net we have not taken any significant stride up or down today. The Nifty closed the day around that 4,050 mark and a bit below that at 4,040 down about 10 points and the Sensex around 13,300 plus, down about 140 points.

But the breadth and the volume pictures did not look very encouraging. Even when the market was rallying from the lows of the day, there was hardly any conviction, which is why we ended up with just about Rs 50,000 crore of trade, one of the lowest volumes of recent times.

But those gains were more than nullified by technology. The index was down more than 5%. Across the board, led by Infosys and Satyam, there was a big slide in big stocks like HCL Tech as well and TCS.

Ranbaxy, because of all that confusion surrounding its plant, was down 10% and HDFC and HDFC Bank also looked a bit sluggish. Today’s listing outside the index KSK had a fairly bad listing. The issue price of Rs 240 plunged to Rs 180 before recovering somewhat closer to the Rs 198-199 mark. But it was not a good listing and other stocks like IFCI and Deccan Aviation remained quite sluggish.  

On the way up, a few of the infrastructure stocks like Hindustan Constructions, Lanco and Indiabulls Realty did not do too badly.

So, today there was a rangebound session. It was not quite breaking below Rs 4,000, but not quite getting above 4,100 either.

Also, the breadth was very sticky from the word go. While a couple of largecap names like ONGC and Reliance pulled the index up, there was no breadth and then we finally ended up with one advancing share with two declining stocks which is not the kind of breadth you want to see. So, the internals are still smacking of a complete lack of conviction. The market seems reluctant to go down significantly from here below 4,000. But it seems equally reluctant  to stay above 4,100. So, we seem to be tossing around in a fairly tight kind of a Nifty range at the moment.

There was some meaningful rallies in stocks like Sail, Tisco, Sterlite and Nalco. Even in some of the power stocks like NTPC, Tata Power and capital goods like L&T, the day wasn’t too bad.