Weak undertone to the fore

The benchmark indices managed to the end in the positive territory, but the overall breadth was weak as most stocks ended in the red on Friday. Nearly 1,700 (about 64 per cent) of the actively traded 2,660 stocks fell on Triday, while just 912 stocks were in the positive terrain, indicating underlying weakness in the market.

The benchmark Sensex, which opened strongly with a rise of 80 points from yesterday, barely managed to keep itself in positive terrain on selling pressure towards the latter half of the day and closed at 15,565.55, up by just 15.42 or 0.10 per cent from Thursday. This is a new high for the index.

In the BSE-500 Index, an overwhelming 320 stocks declined from yesterday, while just 179 stocks advanced from yesterday. Yet, the index closed above yesterday's level, though the margin was as low as 1.68 points (0.03 per cent).

Of the 30 stocks in Sensex, 17 stocks including heavyweights Reliance Industries, Infosys Technologies and State Bank of India, declined.

Small- and mid-caps are showing signs of weakness. Perhaps, the market has run out of steam, said an analyst with a domestic brokerage.

The broader NSE-50 Index also managed to end higher 3.95 points, or 0.1 per cent, to 4,566.05.

Major gainers on the Sensex were Tata Steel (up 4.84 per cent to Rs 715.25), Larsen & Toubro (up 4.15 per cent to Rs 2,475) and Bharti Airtel (up 3.03 per cent to Rs 922.95).

Bharti Airtel attracted big buying after Merrill Lynch said it was one of its most preferred stocks. Merrill expects Bharti to outperform on the back of continued superior execution (coverage) & superior returns (capital productivity).

Despite the continued rise in stock prices, Morgan Stanley analyst Ridham Desai feels the market has some more upward distance to travel.

"While the market is up 23 per cent from its March low in about 18 weeks, our proprietary analysis and other technical indicators do not suggest that the market is overheated. On balance, technically speaking, it seems that the market may bear further upside before becomes get over-cooked. Whether the market reaches our residual income based bull case scenario (18,229 for the BSE Sensex) will be a function of how quickly the market rises, in our view. The slower the rise, the better the chance it will get there," he said in a report released yesterday.

Among sectoral indices, besides BSE Realty Index (up 1.60 per cent), BSE Metal (up 1.48 per cent), BSE Capital Goods (up 1.51 per cent) and BSE Teck (up 0.06 per cent), all the others ended lower.

BSE Consumer Durable Index (1.44 per cent) fell the most. BSE IT (down 0.71 per cent), Auto (down 0.43 per cent), Bankex (0.70 per cent), Oil & Gas (0.70 per cent), PSU (0.57 per cent), FMCG (0.67 per cent), ended lower.