BOMBAY, 26 September 2004 — The Indian stock markets this week had another session of volatile trading. With the deadline for the transaction tax looming large on Oct. 1, the moods on the bourses have turned bearish.
On Monday, selling pressure in select New Economy as well as Old Economy stocks offset gains in pharma, metals and banking stocks. Thereby the BSE ended the day with a loss of 15.33 points at 5,545.82.
Reliance Industries was weak after it announced a cut in the prices of polymers with immediate effect to the tune of Rs. 2,000 per ton (Rs. 2 per kg) across the board on all the polymers. RIL said the price cut was effected to help government in its effort to battle inflation and contain consumer prices. Tata Steel was up on a report that the steel major has paid an advance tax of Rs. 560 crore for the quarter ending Sept. 30.
Tata Motors was upon its expected ADR listing on the New York Stock Exchange by the end of this month.
The ADR listing would be by way of conversion of its outstanding Global Depositary Receipts into ADRs. The company has also announced that it plans to spend Rs. 5,200 crore by March 2007 on new products and capacity expansion.
On Tuesday, mood on the market remained optimistic on the back of sustained foreign fund inflows amid expectations of strong quarterly results from the corporates. The BSE ended with a solid gain of 60.11 points at 5,605.93.
Metal pivotals Hindalco and Tata Steel surged on hopes of improved quarterly results on the back of a firm trend in the metal prices and improved realizations.
Power sector pivotals Tata Power and Reliance Energy were up on reports of an aggressive price band of Rs. 52-62 per share, set by National Thermal Power Corp (NTPC) for its forthcoming initial public offering.
Hindustan Lever ended lower after the company’s Anglo-Dutch parent Unilever warned that current-quarter earnings would miss estimates due to weaker global sales.
On Wednesday, market ended higher helped by buying in select blue chips like Zee Telefilms and Maruti Udyog in an otherwise volatile trade. The BSE ended the day with a gain of 10.94 points at 5,616.87.
There was heavy selling in Bank of Baroda shares after the company announced that it is going for a large equity offering. The Bank said it is planning to float a Rs. 1,500-crore equity issue, which is the biggest market offering by a bank.
The debacle over the telecast rights continues. Zee has now filed a writ petition in the Supreme Court, challenging the cancellation of the contract for the TV rights by the Board of Control for Cricket in India (BCCI).
There is doubt over whether Zee will be able to telecast the forthcoming India-Australia series.
Bajaj Auto gained ground on sustained buying interest on the back of the company’s launch of a new bike, Discoverer.
L&T ended higher after the company announced that its board will consider payment of a special dividend along with its second quarter 2004 results on Oct. 25.
On Thursday, foreign institutional investors (FIIs) kept a low profile and overall domestic retail investor sentiment remained weak, ahead of the implementation of the securities transaction tax on Oct. 1. The BSE sensex fell 77 points at 5539.
Domestic investors are concerned about a possible sell off by investors in mid-cap shares, after the new rules on Securities Transaction Tax (STT) take effect on Oct. 1.
Front-line shares tumbled across sectors. Oil and Natural Gas Corporation, Bharat Petroleum and HPCL were among the big losers. IT stocks also fell, following the track of losses in US markets. Infosys Technologies and Wipro were the big losers.
Orchid Chemicals & Pharmaceuticals was up when it announced that its US discovery JV (Bexel Pharmaceuticals Inc.) that has been working on a novel anti-diabetic molecule (BLX-1002), has successfully completed limited proof-of-concept Phase 2(a) clinical trials in Europe.
On Friday, the bourses slipped into negative territory as profit booking came in. Inflation rose marginally by 0.06 percent to 7.87 percent for the week ended Sept. 11 mainly due to costlier manufactured products including some edible oils.
Pharma, automobile, banking and technology stocks were up. The BSE Sensex ended with a loss of 11.73 points at 5,527.75.
Siemens consolidated on news that the company will execute a Delhi Metro Rail Corporation order in partnership with its parent Siemens AG. Glenmark Pharmaceuticals hit the roof when it announced that it has licensed out a molecule for treatment of chronic obstructive pulmonary disorder and asthma to US-based Forest Labs Inc. in a deal worth up to $190 million. Indiabulls Financial Services made its debut on the Bombay Stock Exchange at Rs. 25, attracting a 31.5% premium to the IPO price of Rs. 19.
Corporation Bank saw activity after it said that it will consider acquiring other banks to protect its identity in the face of anticipated consolidation in the industry.
Stocks of PSUs promoted by the state government of Gujarat rose after the state government set in motion a restructuring process for a dozen state-run firms which could include sales or even closures.
For the coming week, the markets are expected to remain subdued.
Gold was at Rs. 6,175/- per 10 gm and silver was at Rs. 10,435/- per kg.
US dollar vis a vis Indian rupee was at Rs. 45.95, pound sterling at Rs. 81.40, euro at Rs. 56.68, UAE dhm at Rs. 12.51, Kuwait dinar at Rs. 153.03, Bahrain dinar at Rs. 120.82, Saudi Riyal at Rs. 12.247, Qatar riyal at Rs. 12.61 and Oman riyal at Rs. 117.72.
