A battered beginning in equities

Out of 13 trading sessions this year, losses were reported in 9

The equity market has been in the limelight for all the wrong reasons in 2005, reporting losses in 9 out of the 13 trading sessions this calendar year.

Most companies have taken a beating, falling from recent highs as the much awaited correction came after a steep rise in the preceding few sessions.

But some sectors have been worse hit in this 'correction' mode though most have ended in the red. In fact, all the major indices on the Bombay Stock Exchange have reported losses in 2005, with only 3 managing to perform better than the benchmark index.

"The run-up was steep and a correction was expected, besides, some amount of churning and profit taking is also expected in the results season," said a dealer from Motilal Oswal securities.

Bottom-picking at lower levels has helped the market from recording big falls but recovery is still far away as strong buying at higher levels is not being seen, market players added.

Besides, players are churning their portfolios, booking profits in some and buying others at lower levels. Sectors that had seen a sharper run up have seen a bigger fall, analysts said.

Among the sectoral indices on the Bombay stock Exchange (BSE), the pharma sector pointer, the BSE Healthcare index, was the worst hit, falling 15.74 per cent in January while in the same period the benchmark BSE Sensex recorded a loss of 7.57 per cent.

The BSE consumer durables index was down 11.69 per cent, BSE PSU index fell 11.23 per cent and BSE metal index was down 10.87 per cent.

Those indices reporting better figures than the BSE Sensex were the BSE capital goods index, down 7.55 per cent, BSE Bankex index, down 7.49 per cent and the BSE FMCG index down 4.13 per cent.

A dealer from a local brokerage house said, "Despite some positive company results, sentiment remains weak and the next big trigger could be the annual budget expected next month."

The undertone of the market remained cautious amid worries that foreign fund inflows may taper off this year on the back of a stronger dollar.

Sentiment has been furthered weakened by rising international oil prices. Investors are buying into sectors and stocks which they feel will do well despite weakness in the overall market.

Selling pressure from some hedge funds has also been seen, brokers added. Foreign funds have generally stayed away as these were net buyers of Indian shares worth Rs 50.60 crore in 2005 so far.

Domestic mutual funds were net buyers to the tune of Rs 441.90 crore in the same period, data released by the Securities and Exchange Board of India show.