BOMBAY, 30 June — When Dhirubhai Ambani, the chairman of the biggest group in India — Reliance — sneezes, the Indian stock market catches cold. Dhirubhai suffered a heart attack this week and the bourses reacted. On Monday, the BSE closed at 3,231.62.
Markets were concerned about the selling onslaught unleashed by FIIs and also the domestic mutual fund, Unit Trust of India, which is under redemption pressure. UTI pulled a net Rs. 143.55 crore from the bourses last week.
MTNL was one of the day’s major losers. Tata Steel rose with rumors that major steel-makers were likely to raise prices once again from 1 July. Andrew Yule Co spurted after Tide Water Oil reported a whopping 136 percent increase in net profit for FY 2001-02.
Mahindra & Mahindra was also in the limelight after the tractor and utility vehicles major launched its sports utility vehicle — Scorpio. The govt’s decision to permit higher foreign direct investment (FDI) in the print media and tea sectors failed to lift the indices.
On Tuesday the BSE ended the day with a loss of 17.28 points at 3,214.34. Reliance group stocks, Reliance Industries and Reliance Petroleum remained weak. Anil Ambani, managing director, Reliance Industries, said that his father was making "steady progress." Pharma stocks were in the limelight after Parke-Davis announced that it was considering merger with Pfizer.
Tata Tea was a major gainer after the Govt allowed up to 100 percent FDI in tea plantations. Other gainers were Mid-Day Multimedia, Tata Infomedia, Navneet Publication, Macmillan India and Sandesh after it received permission for 26 percent FDI in print media and 74 percent FDI in non-news print media.
On Wednesday, Ambani’s poor health continued to worry the market. The BSE closed at 3,180.89. IT stocks were among the day’s major losers. Reliance stocks continued to lose ground. PSU stocks saw select investment buyers. FACT surged upward. And Gujarat based PSUs, GSFC , Gujarat Mineral Development Corp and Gujarat Industries Power rose with reports that the Gujarat state government was considering PSU privatization.
On Thursday, the BSE closed at 3,217.15. Bargain-hunters moved in to pick up stocks at attractive valuations, after the recent slide.
FIIs were reported to be net buyers to the tune of Rs. 40 crore. Tata Iron & Steel Company was a big gainer after the company announced that it would be raising steel prices, as expected, on July 1 and again on Aug. 1 2002 to take the prices back to levels seen in 2001. ITC gained ground. Mascot Systems was up after it reported having bagged a $2.5 million order from the US.
Ashok Leyland touched a 52-week high of Rs. 121.50 on hopes of further improvement in the commercial vehicles sales in the current month after it reported a year-on-year growth of 6.3 percent in May 2002.
On Friday, the Sensex closed at 3,244.70. Old Economy stocks continued to move up on hopes of a revival in these sectors. India’s gross domestic product (GDP) grew 5.4 percent in the financial year ended March 2002 compared with 4 percent a year earlier according to data released by the government.
Telco advanced on hopes that rising commercial vehicle sales would help the company stage a turnaround. i-Flex Solutions ended below its IPO floor price of Rs. 530 at Rs. 499.45 on selling pressure after a steady opening. VSNL slipped down to Rs. 147.40 on reports that US-based WorldCom owes the company about Rs. 400 crore as settlement charges for carrying traffic in April-June 2002. Pfizer scaled down to Rs. 450 after it decided a swap ratio of 4:9 for the proposed merger of Parke Davis with itself. Power sector stocks were up.
Gold was at Rs. 5300/- per 10 gms and Silver was at Rs. 8265/- per Kg.
US$ was at Rs. 48.87, Pound Sterling at Rs. 74.12, Euro at Rs. 47.98, UAE Dhiram at Rs. 13.30, Kuwaiti Dinar at Rs. 161.59, Bahraini Dinar at Rs. 129.54, Saudi Riyal at Rs. 13.02, Qatari Riyal at Rs. 13.41 and Omani Riyal at Rs. 126.85.
