BY the time you are reading this report, the Nasdaq composite index would decide for the fund managers whether they should follow up Monday’s purchases. True, Indian technology stocks are going dirt cheap. It would make more sense for a fund manager to purchase them at current prices than continue to sell them.

fter all, almost every bad news is there in the current prices. But if Nasdaq closes weak tonight, chances are that fund managers might become edgy and divert their funds to other stocks.

The battlefield
A tough battle raged at the HLL counter on Monday between two institutional players, with both the buyer and seller sharing the honours. The scrip did close in the negative territory, but not before making a strong comeback from the day’s low.

Bulk of the selling is believed to have been done through the participatory note route, with the Say Yes If Be brokerage tipped as the most likely seller. The argument being that the brokerage is already facing the heat from regulatory bodies.

But then, the scrip has been a relative outperformer over the last month or so and Monday’s early morning sell off could be an instance of pure profit taking.

The selling only seemed to attract some of the steadfast followers of the stock who eagerly absorbed a good chunk of the sales.

The names of Cap-It-All and Singapoori Sarkar were doing the rounds, but the identity of the fund is yet to be confirmed.

Cementing the gains
The monthly dispatch numbers seem to be the only element of uncertainty as far as cement stocks go. But more than FMCG goods, cement stocks have now turned out to be the latest defensive plays. Rarely do FMCG companies come together to increase prices of tooth paste, soaps or shaving blades even if the demand slips. But one can always trust cement companies to close ranks and cut production, increase prices, if need be. By the time cement and scrip prices firm up, cracks appear in the cartel. Only to disappear when the market becomes sluggish. From a fund manager’s point of view, the cement sector now seems to have become a running story. The Prudent Fund is reported to have been an active buyer at the ACC counter on Monday.

Trivia
Institutional funds continued with the process of averaging their acquisition cost of Infosys shares, although they will claim that the stock is a screaming buy at these levels. You buy and then scream that prices are still going down. Same story is being played out at the Satyam Computer counter too. The Savvy Fund Manager is reported to be booking profits at the HCL Technologies counter and accumulating Hughes Software instead.
Fund managers who felt they missed the bus at the Zee counter at Rs 100 levels need not fret. They are now getting it at a 25 per cent discount.

As far as this scrip goes, over the last couple of months, the momentum players have been buying high and selling low while the patient fund manager has been buying low and then selling it lower.

Santosh Nair
santoshnair@myiris.com