Mumbai:
Bulls stepped carefully on yesterday’s trading session after the
previous day’s explosion party. Benchmark indicants attained new peaks
early in the trading session, but capitalists’ eagerness was raged by
rising rupee value.

Sellers aimed IT services companies whose profits were linked to the
dollar potency, hence checking the benefits in the main indices. The
reaction was also dragged down by re-emerging of subprime problems in
European countries.

After making its entry on a positive note at 16,341.55, the 30 share
index was hovering between the positive and the negative all-through
the day. During the day, the stock index touched a high of 16,415.88
and a low of 16,261.36. But, finally, the Sensex ended the day with
marginal gains at 16,347.95, up 25.50 points from its last day closing
peak. The 50-share Nifty index ended at 4,747.55, up 15.20 points after
touching a all-time high of 4,760.85.

European markets broke down the two-day advancing streak led by banks,
after Deutsche Bank announced that it would write-off the value of
leveraged loans and abandon hiring plans.

Back to the Indian stock market, IT shares remained under pressure
after the rupee broke the key support level of 40 to the dollar and
stayed put at a nine-year high of 39.90/91. Leading IT stocks including
Wipro, Infosys, TCS and Satyam were in the major losers list after
shedding 2-3%.

R Sreesankar, IL&FS Investsmart research head, said, “IT shares may
remain weak for some time to come. Rupee appreciation is one aspect
that will impact IT stocks in the near term, the other being phase out
of tax breaks in 2009.”

Market analysts feared that selling pressure in IT shares could
strengthened if the rupee remained below the 40-mark. But a few
analysts feel all was not lost.

Nikhil Thakker, UTI Securities research head, said, “Count out the
rupee appreciation factor and the IT sector still looks attractive. The
scale of demand is robust and growth is still there. Investors should
not buy IT stocks for short-term gains; they should buy them with an
investment timeframe of 18 months.”

Stock analysts were betting on non-currency related segments such as
banking, construction, power and capital goods in order to run away the
risks of a rising rupee. Real estate stocks were on a high on yesterday
on anticipation that RBI would obtain signals from the US Fed and cut
policy rates in India.

The BSE Realty index increased 579 points to 9,044.4 on Thursday; the
major gainers of the rally were Unitech, Indiabulls Real Estate and DLF

Manish Agarwal, IDBI Capital equities dealing head, said, “The market
looks pretty good at the moment. Barring intermittent corrections, no
major downside is expected the near term. Investors should not
completely exit from the market at this level; they should partially
book profits and stay invested in quality stocks.”