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Are we in a bull market?

Aravamuthan Sasikant

There is no denying the importance of Infosys in the Indian stock market. Though it ranks second on the market capitalisation totem pole after Wipro, it is the largest capitalised stock in the BSE Sensex at Rs 770 billion (Rs 77,000 crore).

What is its impact on the Sensex? We crunched the Sensex numbers since January 3, 2000 to March 10, 2000 to find out. The Sensex closed on the first day of the year at 5375 points and closed on Friday at 5302 points - almost the same level.

If Infosys were to stay at the same as it was at the beginning of the year, the Sensex would be down about 400 points at 4900 levels!

However, a closer look reveals that there are only six stocks of the thirty Sensex stocks that have gained since then. Does this mean that we are in a bear market if we knock of Infosys from the Sensex? A sub-5000 Sensex would take it to the November-December 1999 levels and below the October 1999 high of 5150 points too.

The bull market of year 2000 is only in a handful of tech stocks. Otherwise, there is only mayhem and plunder.

Larsen & Toubro is the biggest loser in the Sensex having more than halved from Rs 600 to Rs 274. ACC has declined by almost 50 per cent to Rs 131.35. Another heavyweight, BHEL, has fallen Rs 100 to Rs 125. Hindustan Petroleum, TELCO and TISCO have all lost close to 40 per cent.

Infosys has gained 50 per cent to Rs 11700. (The price is adjusted for the two-for-one split in late-January.) MTNL, ITC and ICICI also have an important role in propping up the Sensex to a higher level.

The other five Sensex gainers are: IDBI is currently quoting at Rs 58.90 against January 3, 2000 price of Rs 39.60. ICICI is up Rs 54.65 at Rs 154, BSES increased by Rs 61.55 to Rs 264. MTNL is currently quoting at Rs 320 against its January 3, 2000 price of Rs 208.40, and ITC is up Rs 172 to Rs 890. All these stocks have a technology story for the bullish sentiment. Hindustan Lever, however, is at the same levels.

Without Infosys, we would be in a bear market. If we maintain the other five stocks at the January price level, the Sensex would be at 4600 levels.

The current Sensex doesn't reflect the mood in the market clearly enough. However, with the introduction of Satyam Computer, Zee Telefilms, Dr Reddy's and Reliance Petroleum, the Sensex will become more representative.

	Price on 3/1/2000	Price on 10/3/2000
ACC	268.00	131.35
BAJAJ AUTO	355.30	292.00
BHEL	225.00	125.00
BSES	202.45	264.00
CASTROL	329.55	315.00
COLGATE	229.00	141.50
GLAXO	789.00	450.00
GRASIM	440.00	350.00
GUJ.AMBUJA	334.50	242.25
HIND.LEVER	2391.00	2390.00
HINDALCO	867.00	640.00
HPCL	193.30	114.00
ICICI	99.35	154.00
IDBI	39.60	58.90
INDIAN HOTEL	333.00	275.00
INFOSYS	7839.00	7839.00
ITC	718.00	890.00
LARSEN & TOUBRO	600.35	274.20
MAH & MAH	453.55	344.25
MTNL	208.40	320.00
NESTLE	449.00	345.55
NIIT	3581.00	2500.00
NOVARTIS	1350.00	800.00
RANBAXY	997.00	688.00
RELIANCE	252.35	219.75
SBI	242.70	171.00
TATA CHEM	62.05	43.35
TATA POWER	77.30	68.50
TELCO	217.00	129.50
TISCO	152.90	92.05
Sensex official close	5375.11	5301.78
Sensex without Infosys		4880.07

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