Monday, Oct 27, 2003
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THE STOCK markets witnessed a healthy consolidation of earlier gains last week. The last day of Samvat 2059 on Friday witnessed extremely volatile trading but ended on an optimistic note. The benchmark 30-share Sensex ended the year at 4757.37 with a whopping 1808.05 points gain or 61.30 per cent rise over the previous Samvat's close of 2949.32.
After a loss of 282 points in the first four days of the week, the Sensex gained 108.96 points on Friday and a further gain of 44.20 points in Moorat trading on Saturday.
Helping the market in its recovery after the four-session slide earlier in the week, operators and institutional investors made heavy purchases on Friday in response to the flow of better-than-expected quarterly results. Huge outstanding positions in the derivatives segment kept the markets jittery. However, sentiment remained cheerful with more than 450 companies announcing encouraging performance for the July-September quarter. Most of the bluechip companies reported quarterly results beating market projections.
Operators were heartened by reports that 18 Indian companies were in the Forbes list of successful firms and ICRA's forecast of continued growth in the auto sector till 2007.
Foreign institutional investors which made net investments of Rs. 808 crores in the first three sessions of the week were heavy buyers in key counters.
Earlier in the week, PSE pivotals were weak following the Government's decision to indefinitely defer the divestment of Shipping Corporation of India and Hindustan Copper. On the other hand, refinery stocks were in demand.
Technology and banking stocks took the lead in Friday's trading along with index heavyweights.
NIIT were in demand after its good show. The company's board has approved the proposal to create a new company by carving out the global solutions business out of the company after appropriate segregation of the knowledge solutions business and authorised the preparation of a scheme of arrangement. The purpose of the proposed restructuring is to accelerate growth in the two businesses education and software, according to Rajendra S. Pawar, NIIT Chairman.
Moser Baer India has doubled the net profit at Rs. 82.25 crores in the second quarter against Rs. 40.14 crores in the same quarter last year.
Renewed buying was seen in the banking sector. Syndicate Bank went up after the results. The bank has registered a 78.6 per cent growth in its Q2 net profit.
Among others, ABB were a major winner. The company said it had recently been awarded orders worth Rs. 30 crores to provide automation solutions for steel and cement plants located in China, Morocco, Turkey and Bangladesh.
Auto stocks such as MUL, Tata Motors and M & M went up on expectations of good Q2 results.
In result driven activity, Bajaj Auto closed in the positive terrain after reporting a surge in its Q2 net profit.
Rane Brake Lining were in demand and hit the 10 per cent upper limit on the last two days. The company's board is meeting on October 30 to consider a bonus issue.
Asian Paints witnessed hectic buying. The company has acquired the Government's 9.2 per cent stake in ICI (India), Indian subsidiary of the U.K.-based ICI plc., at Rs. 205 per share.
Amidst continuing uncertainty over the immediate direction of the U.S. economy, the dollar continued to be soft against major currencies. The rupee-dollar rate was no exception. The generally bullish factors favouring the Indian economy kept the rupee strong.
Interest rates move up
Interest rates moved up during the week. This was due to the sale of securities by the Reserve Bank of India through open market operations and also the introduction of 28 days repo to drain out the liquidity. An RBI spokesperson was also reported to have said that expectation of soft rates by the market was irrational. The ten-year security was quoting at 5.15 per cent and the five-year security at 4.85 per cent.
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