BOMBAY, 23 December — This has been a tumultuous week. The attacks on parliament have now given way to possibilities of war. And this has clouded the mood for investment. There has also been sobering news on the Indian economic front. Out of 297 manufacturing industries that comprise the index of industrial production, IIP, for manufacturing, only 16 have recorded growth of over 50 percent. These industries, which account for less than 3 percent of the manufacturing index, are pulling up the overall growth number. Analysts said the government is likely to miss its fiscal deficit target of 4.7 percent of GDP.
The markets were closed on Monday. On Tuesday, the BSE closed at 3,335.88. Cement stocks lost ground on fears that increased supply may put pressure on cement prices. Eternit Everest hit the 8 percent upper limit of the circuit breaker after news that ACC proposes to buy out co-promoter Etex’s shares at Rs.22 per share. Exide Industries rose after the company announced that it has called a board meeting on Dec. 24, 2001 to consider buyback of shares.
On Wednesday the BSE fell by 73.21 points to close at 3,262.67.
Investors, wary of the uncertain political situation, preferred to book profits before the situation turned for the worse. MTNL was down at Rs.130.80 despite a windfall gain of Rs.5.00 billion as income tax refund. A profit warning by US aluminum major Alcoa pulled down the stock of domestic aluminum major Hindalco by 6.55 percent to Rs.633.80. VSNL was also down due to rising concerns about the company’s future profitability following the end of its monopoly on international telephony in India from April 1, 2002. On Thursday the BSE recovered a little to close at 3,271.64. While no major institutional buying was informed, bargain-hunters were said to be active. Zee Telefilms lost further ground, as the markets expressed its dissatisfaction over the joint venture with AOL Turner Warner while it was expecting Zee to offload a part of its equity to a strategic foreign investor. MTNL continued to attract sellers as there is concern about the growing competition in the national long distance (NLD) telephony, following cellular operators’ decision to halve mobile-to-mobile STD call tariff between New Delhi and Mumbai from Jan. 26, 2002. HFCL was down at Rs.94.15 amid talks of the Enforcement Directorate probing into the company’s private placement deal. GKN Driveshafts was frozen at Rs.46.10, the 8 percent upper limit of circuit breaker, after its German parent company made an open offer to shareholders of the Indian affiliate to buy out the remaining 34.9 percent stake in the company at Rs.55 per share.
On Friday the BSE closed at 3,235.49. The undertone of the market continued to remain cautious, as investors preferred to wait and watch before making fresh move. The top gainers of the day were Hindalco, HPCL and Dr. Reddy’s Labs. The top losers were Zee Tele, Satyam and Infosys. Total volumes at close dropped to 84.2 million shares, the lowest this week, indicating the lack of interest among investors. Market breadth was negative with losers outnumbering gainers 957 to 277. Tech shares led the decline in the local markets after networking company Juniper Networks said on Thursday that fourth quarter earnings would be only half of what Wall Street expected. Some defensive shares eked out modest gains as investors shifted assets to safe haven stocks in the wake of the ongoing uncertainty. Pharma stocks were up after Ranbaxy Labs announced that its Nigerian unit had received a $1.75-million order to supply anti-AIDS drugs to the African country. Tire major MRF was down after it reported for FY 2001, a 50.45 percent fall in net profit to Rs.317.4 million. Fund managers and analysts expect shares to move sideways next week as the market remains jittery about the government’s response to Parliament terrorist attack.
Gold was at Rs.4,570/- per 10 gms and silver was at Rs.7,445/- per Kg. US dollar was Rs.47.83, pound sterling at Rs.68.37, Deutsche mark at Rs.21.66, euro at Rs.42.36, UAE dirham at Rs.13.01, Kuwaiti dinar at Rs.155.89, Bahraini dinar at Rs.126.77, Saudi riyal at Rs.12.74, Qatari riyal at Rs.13.13 and Omani riyal at Rs.124.15.
