There was a sudden reversal in the second half of the day and that is the surprising bit about today’s trade because in the morning, it looked as if the same kind of scrip was playing out. Asian markets were selling off because the US has sold off and most Asian markets were down about 3% odd.
We started with a small gap down of a couple of 100 points on the Sensex, recovered almost immediately and then midcaps started outperforming. It looked like it was one more of those days, where India would stand out against global under performance and streak out outperformance of its own. It played along for the first half of the day.
The difference is that the second half the market lost the plot a little bit. In fact there was a fairly severe sell off in the second half of the day, in the last one hour particularly, when the Sensex dropped 350 points and the Nifty was down about a 130. So we are back down to about 19,300 levels for the Sensex. All of it happening very quickly and the midcaps have corrected. That is the interesting bit about trade today. The midcaps, which had been going up corrected, the advance/decline ratio turned negative, the midcap index was down a couple of percentage points and even the Nifty Junior loss some ground.
Now, whether it is just a one day running blip to shake off some of the weaker hands or something bigger we will know in the next few days. But while it was happening, it was looking a little dangerous. May be it is just one of those running corrections which was overdue because the midcap end of the market was getting a bit overheated.
It might have a bit to do with Europe, all that talk of Fed not cutting rates, might have been some whiff of Chinese banks stopping lending or putting some unofficial curbs on lending. That might have filtered in. So, it could have been anything, which injected some uncertainty and there must have been some delivery based selling today. Infosys by the way is back down to Rs 1550 now, tremendous fall that stock has seen. Some of the largecap names like Unitech, ONGC also came off and power stocks too led by BHEL, Tata Power and ABB, also corrected a bit. So, there was selling in the largecap universe.
In the midcaps, it was a little bit mixed. Some of the oil stocks like Essar Oil continue to correct, Bongaigaon and Chennai Petro too have recoiled somewhat. A few of the popular trading stocks likeIndusInd, Syndicate Bank, Alok Industries, Triveni Engineering have corrected today. But it is not one-way at all. We have had some spectacular movers today in the form of Deccan Aviation, which has shot up to Rs 200,which is a 23% move. We had a big move in Jindal Stainless, that was another stock, which stood out, and Prism Cement was another stock, which had a great rally today.
Among other sharp movers SRF, Dish TV and WWIL particularly because of the news reports of that proposed move on FDI and cable TV.
UCO Bank did well and fertilizers led by Nagarjuna and Chambal Fertiliser continues to do well. Interesting mix of midcaps but today after many days, we are seeing some signs of a reversal. So, tomorrow is a crucial day of trade, we will figure out if this was just a one off running correction, just to led some steam off or is there something deeper to it. Tomorrow ofcourse, Religare listing promises to be a cracker of a listing, way-way above its issue price.
Source: Moneycontrol.com
Tuesday, November 20, 2007
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