Last week after opening at 4384, the Bombay Stock Exchange Sensex touched a high of 4500 and dipped to a low of 4378 before finally ending the week at 4416, a gain of around 70 points over the previous week's close. The Sensex was range bound despite hectic buying. The positive aspect of the activity last week was that purchases was not only restricted to software stocks alone but also pharmaceutical shares. This would give the uptrend greater strength if any significant rally is to be expected. Purchases by foreign institutional investors (FIIs) last week amounted to Rs 356 crore, taking their net investments in August to Rs 1,528 crore.
On the corporate front last week, Software Solutions announced its results for the year ending June 2000, wherein its turnover increased from Rs 84.9 crore to Rs 197.5 crore. However, net profit increased 227 per cent to Rs 56.93 crore. The markets gave the results a thumbs up, and the stock surged to end the week at Rs 2,742 on the BSE.
Meanwhile, aluminium prices have been declining on the LME, prompting local producers to offer discounts on listed prices. Investors could refrain from taking fresh exposure to stocks in this sector.
More From This Section
Technically, the index managed to break out of its sideways pattern. And after consolidating in the 4143 to 4370 range for about three weeks, it pierced the resistance level to move to an intra week high of 4500, before ending the week at 4416. Currently, the index is in a correction mode. The decline should be used to get into select technology and pharma stocks with good managements and strong earnings potential and profitability growth.