The index may still not give the complete picture of the overall buoyancy in the market, considering that most of the buying interest is still taking place on software counters. These stocks do not have much of weightage in the indices.
However, at least for the time being, the upside as far software stocks are concerned, looks capped. For one, most of these scrips have run up sharply in the past couple of weeks. While the growth story may hold true, it looks unlikely that foreign funds would want to plough all their allocations into software companies.
Moreover, increased allocations from foreign funds are expected mainly on the back of an economic recovery. Naturally, funds would want to commit a portion of their funds to economy related stocks,which have not really moved up in the recent rally. Secondly, players are talking of the Sensex testing 5500 levels by February. That does not look possible unlike index-based stocks like Reliance Industries, State Bank of India, ACC move up. Once again, with players having made a killing at most of the software counters, the profits will flow into other sectors, mostly that which look undervalued. To that effect cyclical stocks look poised for a sharp move.
Holy deal
The Holy Fund almost inevitably finds itself in the opposite end of the market trend. Just a few month
