BOMBAY, 24 August 2003 — The Indian stock markets have virtually made a sort of history this week. The much awaited happened — the Bombay Stock Exchange (BSE) crossed the 4,000-mark! It called for major celebrations, with a lot of sweets.

The overall sentiments in India are extremely positive now. The Indian economy is on the right track, the monsoons have been good. Positive statements from Reserve Bank of India Governor Bimal Jalan also helped. Jalan has indicated that the economy is in a much better position as compared to 10 years ago.

Prime Minister Atal Behari Vajpayee also did his bit in boosting the moods. During his Independence Day speech last Friday, he announced a Rs. 100,000-crore project to link ports in India. This is likely to further increase the demand for steel and cement.

And the best news is that there has been a surge in Foreign Institutional Investments (FIIs) inflows. The inflow of FIIs for the current month has reached Rs. 1,605.80 crore in the equity market (till Aug. 18, 2003). Their cumulative inflow in calendar year 2003 has reached Rs. 13,793.90 crore (till Aug. 18, 2003), which is a record annual inflow ever since FIIs first started investing in India in 1993. With this, India is now the second-largest recipient of inflows in the emerging markets category after Taiwan.

Turning back to the stock markets, on Monday, the first day of trading, the BSE came tantalizingly close to the 4,000-mark due to all round buying interest. The undertone of the market appeared quite optimistic

The Steel Authority of India (SAIL) was the biggest gainer of the day, rising to a new 52-week high due a firm trend in domestic and international steel prices Tata Steel also spurted to its 52-week high on reports that leading hot rolled coil manufacturers are considering yet another hike in prices, by at least Rs. 1,000 per ton, in September 2003.

On Tuesday, the BSE ended above the 4,000-mark — for the first time after March 8, 2001 — helped by buying support for select heavyweight stocks. The Sensex settled with a gain of 29.18 points at 4,006.91.

Steel stocks which were major gainers on the previous day saw profit taking. Cement stocks surged up. Top gainers were HLL, Reliance, MTNL, Grasim, and Ranbaxy. Hindustan Lever (HLL) was up amid hopes that the company’s fortunes may improve after a good monsoon this year.

On Wednesday, technology and pharma shares were much in demand. Gains in HLL and SBI managed to push the Sensex above 4,050 and it ended the day at 4,056.60, up 49.11 points.

On Thursday, the Sensex breached the 4,100 mark but ended off the day at 4,095.39, notching a gain of 38.79 points. Banking shares were among the star performers. IT and state-run companies were also in the limelight.

ICICI Bank was the biggest gainer. As per market buzz, a couple of FIIs have come out with a “buy” rating for the stock. The Government of Singapore was said to be one of the biggest buyers in this stock.

Rama Newsprint was locked at its 10% upper circuit on reports that West Coast Paper may acquire a stake in the company. Herbertsons, owned by Kishore Chhabria, younger brother of the late Manu Chhabria, was frozen at the upper 5% ceiling following an open offer announcement for 20% equity to shareholders, made at a price of Rs. 90.50. No one is willing to sell now in anticipation of the offer commencing.

On Friday, the market continued to rally though it slipped from higher levels following selling pressure in technology stocks and profit taking almost across-the-board. The market sentiment remained positive following sustained FII inflows and hopes of improved demand following good monsoons.