Market to stay sideways

The market is expected to stay sideways, in absence any major trigger in the near term. The focus may shift to the primary market due to ICICI Bank's large issue which opens for subscription on 19 June 2007.

ICICI Bank, the country’s largest private sector bank said on Thursday, 14 June 2007, it is raising up to Rs 20,000 crore ($4.9 billion) through a follow on public offer in India and US. The funds mobilised through these offerings will be used to expand its international and rural operations, and meet the growing demand for loans.

The issue will open on Tuesday, 19 June 2007, in both the countries and will remain on for a period of four days. The price band will be announced on 17 June 2007. The bank would issue equity shares worth Rs 8750 crore in the domestic market. A similar amount would be raised through American Depository Shares (ADS) listed on the New York Stock Exchange, where the bank is already listed. The fund raising also includes a green shoe option of Rs 2625 crore.

Also the progress of monsoon will be watched closely. The next trigger is expected to come from June 2007 quarter results. Stock specefic buying is expected to continue.

There are some supportive factors for the market. The inflation has declined recently and it now hoveres below 5%.

The domestic bourses closely track movement in global markets. So any sharp correction in global equities may trigger sell-off here as well.

Indian Hotels Company, Godfrey Phillips India, Info Tech Transformers, Inox Leisure, Zicom Electric Security Systems, Banco Products (I), Gujarat Fluorochemicals, Educomp Solutions, Aban Offshore, Gateway Distriparks, Peninsula Land, Amara Raja Batteries and House of Pearl Fashions will declare their audited results next week.