Bulls look unstoppable

F&O OUTLOOK

The bulls were in complete command after absorbing the initial impact of Infosys Technologies' guidance. The bears were seen covering their intra-day short positions in key index stocks and Nifty futures. There is likely to be further consolidation tomorrow and the 19,000 level on the Sensex is not ruled out.

However, the expected stock split announcement in Reliance Industries at its AGM tomorrow may not materialize, and this could trigger some profit booking on the counter in the morning session.

The mighty bulls seem unstoppable as they withstood the six per cent fall in IT stocks on the backdrop of Infosys results, according to Religare.

The intraday profit-taking was well absorbed, without the Nifty breaking the support of 5408. The bulls steadily led the counter attack from there on. The auto, banking, steel and capital goods sectors rallied, while FMCG lagged behind.

Infosys Technologies disappointed punters who had built long derivatives positions on expectation that the company will outperform its earlier second quarter guidance and enhance earnings guidance for FY08.

The guidance provided by Infosys had a bearish impact on IT stocks, with fresh short positions seen in front-line as well middle rung IT stocks.

The BSE IT Index fell by 5.6 per cent, while Infosys and Satyam Computer posted a decline of over seven per cent. However, TCS (down 4.72 per cent) and Wipro (down 2.99 per cent) withstood the pressure.

The open interest in Infosys and Satyam has increased by over six lakh shares, while short positions in TCS increased by two lakh shares.

The future prices of Arvind Mills, IDBI, IFCI, Power Finance, ONGC and ITC increased, accompanied with a decline in open interest.