TNN
Mumbai, Jan 31: Could Dalal Street investors look forward to a few months of temporary relief from volatility? Some believe so after the market, during the current month, weathered the worst corporate malfeasance in Indian history and also showed resilience to withstand one of the worst quarterly earnings season in recent time.
During January, despite the Satyam scam and a series of net losses from blue chips, on Friday, the last trading day of the month, the BSE sensex closed just about 300 points (3%) lower at 9,424. And investors are poorer by about Rs 1.4 lakh crore with BSE's market capitalization now at Rs 29 lakh crore.
"The worst corporate scam and a bad results season is behind us. The exipry (of January derivatives contracts) is also over. So for the current quarter, unless something goes wrong drastically, the market could see some relief,'' said Anish Jhaveri, head of equities, Antique Stock Broking.
Domestic companies, especially insurance firms, could play an important role in bringing in some stability to the market. "Foreign funds, which are still cautious, are selling but insurance firms are buying,'' Jhaveri said. Institutional trading data on the BSE showed that in January while FIIs have net sold stocks worth nearly Rs 5,200 crore, net buying by domestic institutions was at about Rs 3,700 crore.
Observers feel the market could witness some stability till the Lok Sabha elections. The feeling on the street is with polls expected in April-May, investors could expect to see less volatile markets at least till March-end.
In Friday's market, after a shaky start, rally in heavyweights like Reliance Inds and SBI, along with stocks like DLF, Jaiprakash Associates and Hindalo helped the sensex recoup about 350 points to the day's high of 9,438 and closed near that level. Of the 30 sensex stocks, 25 ended higher while five ended lower. The day's rally was helped by positive expectations in RIL which would soon start production of gas in its KG6 basin. The late buying momentum was also helped by strong cues from the Asian and European markets.
On the BSE, 1,377 stocks advanced compared to 1,015 laggards. Turnover at about Rs 3,600 crore was higher than current month's daily average of Rs 3,525 crore.