Street Signs

SMART EYE

Things have come to such a pass that when PC books a ticket to Mumbai, the markets are in for a roller-coaster ride. The visit more or less determined the mood at the bourses last week.

If anyone thought that the markets have bottomed out, after the customary over reaction to government sound bites - read CMP- on Friday, they were proved wrong.

A fifth consecutive fall was in store on Monday, though this time the blame was put on fears about rising oil prices. There were more signs of sanity on the following days as bargain hunters led the indices to gains, riding on the back of good monthly sales numbers from auto companies.

Frangipani, who had sold a net $743 million worth of desi shares in May, were also in the buying mode for a change. Enter PC. Exit investors. Elucidiations which practically amounted to nothing - markets will be strengthened, interest rates will not rise and 7-8 per cent GDP growth - brought back the sellers in full glory.

Frangipani had some reasons to cheer though, as PC promised them to review the capital gains tax regime. With him back in North Block, bargain hunters had another peep on Friday, ensuring that week ended on a positive note. May be next time PC comes visiting, there should be some lead time so that markets can factor in the implications.

Home is where the heart is
Desi fund Tumble-Ton is busy realigning its portfolio. Out goes Power Trading Corp and in comes LIC Housing Finance. First things first. The thumbs down to the PTC scrip is no surprise at all since sentiments at the power counters have taken a nose dive following the new government's pronouncements vis-à-vis the Electricity Bill.

But it is surprising that the fund has chosen to invest in LIC Housing Finance. While skeptics note that the housing finance company is not the top dog in its category, Tumble-Ton has its own reasons for having made fresh purchases at the counter.

The reasoning could be that the company's conservative approach and the LIC support factor makes it a safe bet in these uncertain times.

Tumble-Ton is said to have bought more than three lakh shares at the counter from Frangipani Castro Fund at Rs 139 in a block deal early last week. But the traffic is not all outgoing at the counter. Heard that TV Rating Fund has picked a pile of PTC shares from Tumble-Ton last week.

Anybody's guess
While the theme at the banking counters of late has been that of "value buying," Lending Brokerage is having none of it. While analysts were pointing to the banking stock universe as a bargain hunter's paradise after the recent hammering, Lending Brokerage was dumping ICICI Bank apart from their PSU holdings.

The brokerage is putting up a brave front regarding the future direction of government policy and has decided to wait for more clarity to emerge post-Budget. But here's the catch.

The firm says stocks in sectors like banks and oil and gas apart from others, that have rallied on expectations of policy initiatives are most likely to underperform in the near-term.

But, there are other analysts who believe that with the new government willing to spend more on rural infrastructure, there will be a surge in credit offtake, which will benefit the banks. Now it is up to you to decide whom to listen to.