BOMBAY, 2 March 2003 — The Indian stock markets this week put aside its war fears and got into a pre-budget rally.
On Monday, the BSE staged a smart rally with strong gains in technology counters and gains in index heavyweights. The BSE closed the day with a whopping gain of 59.04 points at 3,282.45. ACC leaped up on talk that the market regulator might ask Gujarat Ambuja Cement to make an open offer for a 20 percent stake in the company. BSES also surged on reports that Reliance Industries has raised its holding in the company to about 58 percent from 44 percent. Hughes Soft gained ground on reports that US-based General Atlantic Partner has initiated talks for a stake in the company.
On Tuesday, the BSE ended the day flat as activity was very stock-specific and mainly news-driven. It ended the day with a modest gain of 6.64 points at 3,289.09. HPCL was the top gainer on the Sensex in anticipation of disinvestment. There were reports that Reliance is also likely to bid for the government stake in the company, which triggered fresh interest in the counter. Tech stocks were the biggest losers of the day due to rising concerns about the likely imposition of corporate tax on software companies in the forthcoming budget. On Wednesday, the BSE closed higher as the bullish sentiment prevailed. Several old economy counters witnessed fresh buying interest, but profit-taking in most technology counters capped the Sensex’s gains. The BSE ended with a 12.95-point gain at 3,202.04. Bank shares were the star performers. Encouraging news that the government has finally decided to exclude the State Bank of India’s GDR issue from the FII cap of 20 percent, as well as expectations of a raised cap for FIIs in all public sector banks to 49 percent from the current 20 percent, drove these shares higher. Andhra Bank, Bank of Baroda, Corporation Bank, and PNB all closed with big gains. Steel stocks were in the limelight following reports that HR steel makers have decided to increase prices by a hefty Rs.1,500-2,000 per ton.
On Thursday, the BSE ended with a marginal gain of 1.18 points at 3,303.22. Recovery in technology counters and selective buying in pharma, FMCG, and refinery shares helped the Sensex close the day in the positive range. PSU banking stocks saw selling as operators and institutions were offloading on these counters. ITC was down after the government approved a bill to impose a total ban on advertising of tobacco products on television and in the print media. Cement stocks were depressed on reports that companies have cut prices by over 10 percent in the north in order to boost sales. On Friday, the BSE ended with a small gain of 3.98 points at 3,307.20.
Of the 1,631 issues traded on the exchange, declines outnumbered advances, with 774 losers and 691 gainers. One hundred and sixty six issues ended unchanged.
Reliance Industries was one of the biggest gainers of the day on news that its recently launched telecom services under Reliance Infocomm had met with an overwhelming response from customers. Hero Honda slipped on selling pressure, following reports that a leading research house has downgraded the stock. BPCL recovered from its low of Rs.220 on reports that the Disinvestment Ministry is planning to offload a higher (25 percent) stake through the ADR issue route. Gold was at Rs.5,630/- per 10 gms and silver was at Rs.7,740/- per Kg.
US dollar vis-a-vis the Indian rupee was at Rs.47.73, pound sterling at Rs. 75.10, the euro at Rs.51.24, the UAE dirham at Rs.12.96, the Kuwait dinar at Rs.158.60, the Bahrain dinar at Rs.126.30, the Saudi riyal at Rs.12.69, the Qatar riyal at Rs.13.07 and the Oman riyal at Rs.123.61.