BOMBAY, 1 July — The markets began trading on a bad note on the very first day of trading. The BSE Sensex ended the day at nine-week low on Monday at 3,318.76 points, its lowest since April 17, losing 63.09 points. With the July 2 deadline for halt in carry-forwards, most preferred to sell. IT stocks saw a lot of selling as there are now worries of revenue and profit growth slowing down in the current quarter. The NSE closed 20.65 points over at 1,067.
Only one stock which moved against the trend was Dr. Reddy’s Laboratories. It hit a 52-week high at Rs. 1,539.90. There was immense optimism in the scrip following the governments draft policy which reduces the number of drugs which come under the government price control, and allowing drug makers to charge more under certain circumstances.
PSI Data Systems hit the 16 percent lower limit of the circuit breaker after the Aditya Birla group’s Indian Rayon announced that it will acquire Groupe Bull’s 50.35 percent controlling stake in the company at a price of Rs. 186.80 per share. On the other hand, Indian Rayon ended the day on a positive note.
On Tuesday, it was largely expected that the markets would fall once again. But behaving in the most unpredictable manner, the markets actually bounced back on account of renewed buying support from institutions and operators. The BSE settled with a gain of 88.65 points at 3,407.32. The NSE gained 29.60 points to 1,096.60.
Institutional investors were believed to have turned aggressive buyers in tech pivotals. NIIT, Satyam, Infosys and Zee saw a lot of buying. Pharma stocks like Dr. Reddy’s, Cipla, Ranbaxy Laboratories and Glaxo also gained ground. Buying was also seen on cement counters like L&T, ACC, Grasim.
MTNL was also a major gainer after it announced a cut in its mobile phone services rental to Rs. 250 per month from Rs. 400 per month. The company has also cut charges on the outgoing calls to Rs. 2 per minute from Rs. 2.70 per minute earlier. The new charges took effect on June 27.
After the see-saw rides of Monday and Tuesday, the markets remained almost flat on Wednesday. The BSE ended the day with a modest gain of 4.32 points at 3,411.64. The NSE also gained 1.25 points to 1,095.35.
While the institutional investors were active in select new as well as old economy stocks, the market turned cautious ahead of the fast approaching July 2, 2001 deadline banning carry-forward trading.
Titan Industries, the watch and jewelry making company from the stables of the Tata’s ended in the red ahead of the announcement of its FY 2001 results. After market hours, it posted a 21.78 percent rise in net profit to Rs. 23.48 crore (Rs. 19.28 crore). And Modi Rubber was up after it was learned that Securities and Exchange Board of India (SEBI) had validated its open offer for buying shares from its shareholders at Rs. 90 per share.
The markets continued to remain flat on Thursday too. The lower-than-expected 0.25 percent cut in interest rates by the US Federal Reserve did not have any major impact on the sentiment of the market. The BSE lost 6.78 points to close the day at 3,404.86. The NSE lost 3 points to settle at 1,093.10.
One of the major losers of the day was ICICI which saw immense selling reports came in that the Japanese Bank for International Cooperation (JBIC) warned that it will invoke the guarantee provided by Indian financial institutions for the foreign loan of $2.9 billion granted to Dabhol power plant.
Bank of Baroda saw selling when for Q4 it announced a net loss. And for the full year ended March 31, 2001 (FY 2001), profits fell to Rs. 274.66 crore (Rs. 502.77 crore). Apollo Tires was also down after it announced a 66.58 percent drop in net profit for FY2001.
The market closed on a firm note on Friday on buying support in select old as well as new economy stocks. Speculators unwound their large positions in some stocks (positions taken after May 14, 2001). The surge in the Sensex was partly attributed to the covering of short positions. The BSE ended the week with a gain of 51.92 points to 3,456.78. The NSE gained 13.90 points to 1,107.90. Of the 1,509 issues traded, advances outnumbered declines with 740 gainers and 622 losers. 147 issues remained unchanged.
Foreign institutional investors (FIIs) turned buyers in some new economy stocks. Being the last day of the financial year for Unit Trust of India (UTI), the country’s largest mutual fund was believed to have made purchases in heavyweight stocks to prop up net asset values of its schemes. The coming week will mark the beginning of a new era on the Indian stock markets and once can only wait and see how the markets get adjusted to futures and options. It is best for retail investors to wait it out.
Gold was at Rs. 4410/- per 10 gms and Silver was at Rs. 7365/- per kg.
US dollar against Indian Rupee was at Rs. 47.04, Pound Sterling at Rs. 66.26, Deutsche Mark at Rs. 20.33, Euro at Rs. 39.76, UAE Dhm at Rs. 12.81, Kuwait Dinar at Rs. 152.71, Bahrain Dinar at Rs. 124.72, Saudi Riyal at Rs. 12.91, Qatar Riyal at Rs. 12.54 and Oman Riyal at Rs. 122.13.
