Sensex crosses 5,000 mark

The Indian share market is expected to consolidate at current levels this week after the key equity index closed above the psychological 5,000-mark once again last week on the back of sustained buying in both frontline and mid cap stocks.

In the week to Friday, the Sensex gained 4.2 per cent to finish at 5,044.82 points. On the National Stock Exchange, the Nifty index closed the week at 1,615.25 points, up 4.8 per cent on the week.

"We see the market consolidating at current levels this week. The Sensex is likely to move range bound with 100 points swing on either side," said Antony Sequeira, managing director of Arcadia Share and Stock Brokers.

According to traders, almost 70 per cent of the total outstanding volume in the Nifty futures was rolled over to December following the expiry of November series contracts in the derivatives segment on Thursday.

The sentiment was boosted by market data, which showed foreign investors remained active in Indian equities after signs of a slowdown in inflows in recent weeks.

"The key driver for the market will be the outcome of assembly elections in four states in December. Foreign funds are closely watching the Indian scenario as any setback to the ruling BJP coalition at the current polls would have a negative impact on the inflow of funds," said the head of a foreign mutual fund.

Technology stocks are expected to draw attention after the Organisation of Economic Co-operation and Development (OECD) predicted a robust growth of 4.2 per cent in the US economy in 2004 after many years of stagnation.

Analysts say a strong recovery in the US economy could change the fortunes of Indian software exporters, as the world's largest economy accounts for 70 per cent for the Indian IT revenues.

Shipping counters are likely to get further boost as global freight rates for both dry bulk carriers and tankers continue to move upwards. Shares of Shipping Corporation of India, GE Shipping and Varun Shipping have posted sharp gains over the past few weeks. Traders say the trend in Chinese market holds the key to the future direction in bulk rates.

"The mood remains buoyant. There is room for further upswing, as some mid cap stocks still look attractive. We expect the index to stay in the range of 4,800-5,200 levels in December," said a dealer at a leading Mumbai brokerage.

The outlook for the fast moving consumer goods (FMCG) sector remains gloomy on reports that prices of inputs like palm oil, milk and soda ash have been moving up in the world market for a while. Analysts say an increase in input prices could immediately reflect on the cost of consumer goods manufactured by FMCG majors like HLL, Godrej, Colgate and Nestle.

According to media reports, foreign institutional investors have started offloading their holdings in fast moving consumer good stocks in the past couple of months. Despite adequate rains in most part of the country this year, FMCG counters have not participated the current bull rally.