The Hindu Business Line : Few props for mauled market — Extended holiday adds to uncertainty

UNCERTAINTY looms large over the fate of bourses in the coming week due to the spate of bank holidays which leaves traders with only three days to recover from last week's carnage.

The war and the killer flu notwithstanding, Indian bourses witnessed a crisis of a different kind last week.

In the last two days, major indices plunged, with the Sensex alone shedding over 117 points while the market capitalisation kept shrinking.

Sadly, the trend is not expected to change too much next week. Reason: buying opportunities are aplenty but there is no money to buy. That, coupled with a string of bank holidays, bringing with them payment and delivery problems.

And all this because Infosys Technologies gave a "conservative guidance" for the 2003-04 fiscal at just over 10 per cent!

Brokers and analysts blame each other for not seeing it coming. A prominent fund manager said that analysts are too stubborn to admit that the guidance or revenue estimates could be lower than they anticipated, especially keeping in mind the decline in software exports.

The mostly sentiment-driven stock market is expected to fluctuate further with uncertainty growing on account of results of key companies next week.

Mr Prashant Nair, Assistant Vice-President (Equities), Pranav Securities, said: "Volatility is expected during intra-day trading. People will be looking to make up for the losses made on account of Infosys in the past two days.''

Although a tech stock rebound is in the offing, the general feeling among the broking community is that there is no depth in the market at the current levels.

"Post-Easter, bargain hunters are expected to bring in some cheer at the technology counters with some value buying."

The spate of bank holidays over the weekend and during the coming week will keep trading on the bourses subdued to a certain extent.

Mr Krishnamurthy Vijayan, Chief Executive Officer, JM Capital Management Private Ltd, said: "Most players will look at unwinding positions as they would not want to be stuck with a counter that has the scope for action next week. This is so because losses could be higher, especially with the market remaining open for just three days.''

Smaller brokers are expected to face relatively more payment and delivery problems due to the holidays next week. "On account of the bank holidays, smaller brokers could have settlement issues or payment difficulties,'' Mr Nair said.

Most fund managers perceive 3,050-3,250 levels as a stable range for the Sensex to settle into. However, the caution on the bourses continues.

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