BOMBAY, 28 July — The Indian stock markets this week had a bad spell, led by the global slump and also rising concerns of a drought-like situation in several parts of the country. India may be a IT giant but even today, 70 percent of the population lives in villages and agriculture is the mainstay.
On Monday, the market sentiments were affected by the fall in the global slump and this led to the BSE losing 76.93 points to settle below the 3,200-mark to close at 3,153.34.
Moreover the below-market-expectations of quarterly performance by Hindustan Lever added to the ruing moods.
The biggest loser of the day was Dr Reddy’s Labs. The stock incessant selling after Novo Nordisk decided to suspend the clinical development of the company’s anti-diabetic drug.
Zee Telefilms continued to attract sellers after it reported a 44 percent fall in the net profit for the first quarter. Hindustan Lever also added to the fall when for the second quarter ended 30 June 2002, it posted a 4.13 percent fall in net profit to Rs.4.47 billion on sales of Rs.26.72 billion.
L & T ended lower at Rs.168.60, as the stock was quoted on ex-dividend basis. The company has declared 70 percent dividend for FY 2001-02.
A gainer of the day was Hindalco after the group proposed the merger of Indo Gulf Corporation’s copper business with Hindalco, in a share swap deal. A possible merger of Indian Aluminum (Indal), is now rumored to be on the cards.
The markets turned around on Tuesday. The BSE ended the day with a gain of 23.59 points at 3,176.93. Tata Steel lost ground, when for Q1 it posted a net profit of Rs.659.2 million (Rs.205.3 million) on sales of Rs.18.27 billion (Rs.16.11 billion).
Godrej Consumer Healthcare touched a new 52-week high of Rs.115 after it reported a 39 percent rise in net profit for Q1 also approved buyback of equity shares at a maximum price of Rs.174 per share.
Fears of a drought like situation in the country led to an almost panic situation on the bourses on Wednesday with stocks falling like nine pins. The BSE ended with a loss of 69.45 points or 2.19 percent at 3,107.48 which is its eight-month low.
ITC, Reliance Industries, Reliance Petroleum, Hindustan Lever, Bajaj Auto, Telco and Hero Honda Motor lost ground on selling pressure amid the monsoon woes.
ACC also lost ground after it posted a 55 percent fall in net profit for Q1.
Jammu & Kashmir Bank moved up to Rs.95.15, on reports that the bank was looking at placing up to 15 percent of its equity with foreign investors at Rs.200 per share. The market continued on its losing spree on Thursday. Ending the day with a loss of 12.52 points at 3,094.96, it touched a new eight-month closing low. Telco was down. On the other hand, Tata Steel saw some upward movement on reports that Tata Sons and group companies may raise their stake to beyond 26 percent. Satyam Computer was extremely volatile after it posted a 10.71 percent fall in net profit. HDFC was one of the few gainers of the day after it reported for Q1 a 20.4 percent rise in the net profit.
And on Friday, the moods continued to remain bearish and the BSE settled at a new 9-month low of 3,024.35, losing 70.61 points.
Infosys Technologies was a major loser of the day following the reports of trouble with the company’s business dealings in Kenya.
ITC rose after it posted for Q1 a 15.24 percent rise in net profit.
Public Sector stocks (PSUs) were in the limelight after it was announced that the government would raise Rs.265.00 billion during the current fiscal by selling its equity stake in PSUs like ONGC, Indian Oil, Gail, NTPC and BSNL.
Tata Power was down after it reported a 3.28 percent fall in net profit for Q1.
For the coming week, the trend of the market will depend on the state of the global markets and the progress of monsoon. Any signs of revival in the monsoon may revive the market or else it may breach the 3000-level.
Gold was at Rs. 5,160/- per 10 gms and silver was at Rs. 8,265/- per Kg.
US dollar vis-a-vis Indian rupee was at Rs. 48.68, pound sterling at Rs.76.00, euro at Rs. 47.20, UAE dirham at Rs.13.29, Kuwait dinar at Rs.162.60, Bahrain dinar at Rs.129.37, Saudi riyal at Rs.13.01, Qatar riyal at Rs. 13.40 and Oman riyal at Rs.125.08.