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K Sheshadri
August 17: A fifty per cent dip in the exchange value of the rouble has hit the recovery process on the Indian bourses. The Sensex lost 52 points to close at 2917. The impact was felt not only on Indian markets but also on the Japanese markets, which is reported to have fallen by two per cent.The Sensex opened at 2983, some 14 points over the previous close. It also went up to a high of 3002. But the break out of the Russian news brought the index down to a low and close of 2917.
On the daily charts for the Sensex, the stochastic indicator is still in the positive territory. One cannot be sure at this point that the Sensex would continue to slide tomorrow. That would depend on how the other markets assess the impact of the rouble fall. There is already company specific reaction in Japanese stocks. Those companies which export to Russia have seen their stock prices come down. Similar reaction is likely in India. The country has toned down its tea exports to Russia for quite some years. Yet, one would have toreassess particular liabilities right now.
On the technical score, there is some inherent weakness in HLL. This scrip was actually priming up to move up. But on a panic situation, it can well go down to Rs 1560. HPCL may be immune to further attack as it has already gone down recently. Bajaj Auto has been able to hold its own and this gives an indication that the Russian flu might have only selective impact. Hindalco is neutral in as much as it is back to the base line having given up the gain of the previous day. But take a look at ICICI, and you can see that operators would rather square off rather than hold long positions.
ITC too confirms this approach. Most of the other scrips in the Sensex list have fallen sharply; these include Larsen & Toubro, Mahindra & Mahindra, Nestle, Ranbaxy, SBI and Reliance Industries. Sensex could easily shed another 100 points. It would be best to stay out of the market until the storm blows over. One should consider squaring off one's position. The market could have beennumbed with the first shock and hence, could go down further. Long term investors should hold their positions. August 17: A fifty per cent dip in the exchange value of the rouble has hit the recovery process on the Indian bourses. The Sensex lost 52 points to close at 2917. The impact was felt not only on Indian markets but also on the Japanese markets, which is reported to have fallen by two per cent.The Sensex opened at 2983, some 14 points over the previous close. It also went up to a high of 3002. But the break out of the Russian news brought the index down to a low and close of 2917.
On the daily charts for the Sensex, the stochastic indicator is still in the positive territory. One cannot be sure at this point that the Sensex would continue to slide tomorrow. That would depend on how the other markets assess the impact of the rouble fall. There is already company specific reaction in Japanese stocks. Those companies which export to Russia have seen their stock prices come down. Similar reaction is likely in India. The country has toned down its tea exports to Russia for quite some years. Yet, one would have toreassess particular liabilities right now.
On the technical score, there is some inherent weakness in HLL. This scrip was actually priming up to move up. But on a panic situation, it can well go down to Rs 1560. HPCL may be immune to further attack as it has already gone down recently. Bajaj Auto has been able to hold its own and this gives an indication that the Russian flu might have only selective impact. Hindalco is neutral in as much as it is back to the base line having given up the gain of the previous day. But take a look at ICICI, and you can see that operators would rather square off rather than hold long positions.
ITC too confirms this approach. Most of the other scrips in the Sensex list have fallen sharply; these include Larsen & Toubro, Mahindra & Mahindra, Nestle, Ranbaxy, SBI and Reliance Industries. Sensex could easily shed another 100 points. It would be best to stay out of the market until the storm blows over. One should consider squaring off one's position. The market could have beennumbed with the first shock and hence, could go down further. Long term investors should hold their positions.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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