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Bourses rebound on strong results

BOURSES BOUNCED back last week from the earlier depressed levels, regaining a substantial part of the losses. The last three sessions witnessed a gain of 312 points in Sensex. On Friday alone the index had gained 180 points. The resumed buying by foreign institutional investors and local funds was spurred by excellent third quarter results from many corporates. On the last day of expiry of futures and options contracts (Thursday) huge positions were carried forward with investors deciding to carry over instead of pulling out from the market.

The fresh wave of buying was also attributed to the Government decision permitting non-government provident funds to invest up to 5 per cent of their new assets in bluechip shares and 10 per cent in corporate debts and equity oriented mutual funds from April. Though the announcement came late in the evening on Friday it is felt that market marketmen could have anticipated it earlier. Also, the relaxation of investment norms for superannuation and gratuity funds in a bid to provide wider avenues in the wake of falling prices of government bonds is expected to make the bond markets active.

For the whole week the Sensex registered a gain of 236 points or 3.8 per cent at 6419.09 against the previous weekend close of 6183.24. The gain of 179.66 points on Friday was also the biggest since May 18 when it had risen by 371.86 points.

The 50-share S&P CNX Nifty of the National Stock Exchange gained 83 points (4.3 per cent) to settle at 2,008.30. The CNX Mid-cap 200 index rose sharply by 100 points (4 per cent) to end the week at 2565.95. The BSE-100 index flared up by 127.72 points to close at 3482.16. The BSE-200 index and the Dollex-200 were quoted sharply higher at 850.45 and 323.42 against 817.18 and 310.76 respectively.

The BSE-500 Index spurted by 102.29 points to 2670.73 and the Dollex-30 finished the week at 1203.76 against 1159.53.

The rebound was widespread with medium and small cap stocks joining the rally. On Friday, the BSE clocked a turnover of Rs 2,500 crores.

Further flow of encouraging third quarter numbers resulted in an upbeat in sentiment with State Bank of India providing the lead. Maruti Udyog, National Aluminium, L&T, GE Shipping, Hexaware, Sesa Goa, NTPC and Ashok Leyland were among the companies to announce improved results.

The FIIs, which reported net sales of Rs. 440.40 crores in the first two sessions, made fairly good purchases of Rs. 198.80 crores on Thursday. Mutual funds also stepped up their buying activities.

Steel stocks were in the limelight following the announcement of excellent quarterly results by major steel companies, and the expectation of continued firmness in steel prices. Tisco finished the week at Rs. 381 while SAIL rose sharply by 10 per cent to close at Rs. 60.75. Essar Steel and Ispat Industries were among other notable gainers. Sesa Goa went up by 22 per cent to Rs. 1,252.

Among non-ferrous metal stocks, Hindalco, National Aluminium, Sterlite, and Hindustan Zinc were in keen demand. Maruti Udyog, Ashok Leyland and Mahindra & Mahindra in the auto section witnessed heavy buying following encouraging Q3 numbers. Buying was in evidence in Bajaj Auto which closed at Rs. 1,050 (4.5 per cent). Tata Motors was a notable gainer.

Technology stocks witnessed fresh buying with Infosys gaining 4.6 per cent at Rs. 2,043. Wipro closed 3.4 per cent up at Rs. 698 and Satyam Computer at Rs. 400 (2.2 per cent). Following the announcement of impressive quarterly results Hexaware went up by 9.5 per cent to Rs. 674. TCS was up by 4 per cent at Rs.1295.

Pharma stocks witnessed a mixed trend with Ranbaxy ending higher by 5.5 per cent at Rs. 1,076, Cadila at Rs. 509 (7 per cent); Cipla (Rs. 274.50) and Dr. Reddy's Lab (Rs. 744).

Interest rates stable

Interest rates remained steady during the week. The ten year government security was traded at 6.73 per cent and the five year security at 6.48 per cent. The year on year inflation came down to 5.42 per cent for the week ended January 15.

Rupee gains

Overcoming customary month-end pressures and firm global oil prices, the rupee posted sharp gains against the U.S. currency on the back of strong trade remittances and buoyant stock markets. In fairly volatile trade at the interbank foreign exchange market during the week, the rupee ended at Rs. 43.7150/7250 a dollar, steeply higher from the previous weekend finish of Rs. 43.81/82 after absorbing the usual month-end dollar demand from large offshore oil companies.

There were only four trading sessions, as the forex market remained closed on Wednesday for Republic Day.

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