The market appears to have fully digested the fall out of the Lok Sabha dissolution. The sensex was down by just 1 point. The market opened with the sensex at 3479.41, some 10 points higher than the previous close of 3469.08. It moved up to post an intra day high of 3493.21, much lower than the previous high of 3452.27. The low for the day was at 3455.86 and the market closed with the sensex at 3468.19. The loss to the index has been mainly from ITC, which lost 2.13 per cent. Other heavy weight counters like BHEL, ACC, HLL and HPCL too lost on the bourse. But that was to be expected in a market which has no incentive to move up.

On the other other hand Reliance and SBI moving up shows that the market has bottomed out. Several other scrips like BSES, Colgate, GE Shipping, Glaxo, ICICI and IDBI are gaining. Hindalco gaining is another confirmation that the market has bottomed out.

Coming back to sensex you will see that the opening was subdued. But the closing was at par with that on Friday. In fact this pattern is likely to persist for a few more sessions. Scrips which are overvalued will shed their fat to become real slim. On the other hand those that have become lean are acquiring flesh. Tuesday being the closing day for the NSE, there could be pressure of squaring off. But with the market having been in subdued mood over the last 3 sessions, Tuesday's market should give plenty of indications.

If the market is weak, bears will dear to drive down. But I think they will hesitate. On the other hand profit booking can take place, provided Friday's trading at BSE has not already brought this about.

In any case Tuesday will provide investors with valuable indication in terms of bottom testing for one more occasion. Also cautious profit booking on counters which have gained on Monday can be expected, and that can bring the sensex down. However, that will only provide a good bouncing point for Wednesday morning.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.