BOMBAY, 7 September 2003 — Indian stock markets continued with their surge throughout this week. The Sensex has rallied about 47% from a six-month low hit in late April, boosted by hefty foreign inflows. Foreign fund investments totaled a net $145.9 million in the first three days of September, and $1.51 billion in the three months ending August. On the first day of trading, Monday, the market began trading with a big bang.
Following sustained buying support for stocks across sectors. the BSE surpassed the 4,300-mark and ended the day at 4,324.76, gaining 80.03 points. The reason for this jump was mainly the Sensex turning free-float.
Fund managers or foreign funds who invest as per the weightage of stocks in the Sensex are believed to have reshuffled their portfolios, giving more weightage index stocks. HDFC, ICICI Bank and L&T were some of the biggest gainers of the day as they benefit from the free float form.
Textile scrips also saw a lot of activity due to anticipation of a good cotton crop following the better than normal monsoon. The losers of the day were auto stocks. This was on account of the oil companies announcing a steep hike in prices of petrol and diesel. Petrol prices in Bombay have gone up by Rs. 2.28 to Rs. 37.42. Diesel prices have risen by Rs. 1.49 per liter to Rs. 25.75.
On Tuesday, the markets were very volatile with wild ups and downs. Yet, the BSE managed to end the day with a modest gain of 14.40 points at 4339.20. New Economy stocks saw buying but this was offset by selling in the Old Economy scrips. Satyam Computer was in the limelight following reports that the company is considering plans to buy-back shares.
Royal Airways spurted after the company said that it has received a no-objection certificate from the customs department to relaunch its services. There was selling pressure in Maruti Udyog prompted by a steep hike in petrol prices and a fall in car sales for August 2003.
On Wednesday, the much expected correction finally happened. And the analysts heaved a sigh of relief as it was not very healthy for the market to be headed only northwards. There was all-round selling and the BSE ended the day at 4257.94, 81.26 points below.
Punters said that selling by a leading local institutional investor and unwinding of positions by traders triggered the fall. But moving against the trend was Tisco which turned out to be the biggest gainer of the day on expectations of a product price hike. Hindustan Lever lost ground on reports that its retail sales dropped 10.1% in the period May-July 2003.
On Thursday, though trading began on a dull note in the morning, it picked up in the later half as buying came in at the lower levels. The BSE gained 52.57 points to 4,310.51. Infosys Technologies up saw heavy fund buying amid rumors that the company has won a large offshore order.
Steel shares surged following reports that Japanese steel major Nippon Steel has suspended operations at its Nagoya Plant in central Japan after a blast and a subsequent fire that injured 15 workers. Reliance Industries was also up after Moody’s Investors Service revised the rating outlook on the debt securities of the company to stable from negative.
On Friday, market remained stable with the Sensex gaining over 58 points to close at 4,369.17 points. IT sector went in for a correction while HLL, Reliance and SBI were instrumental in keeping the index buoyant.
Power, steel and auto stocks were also up. Tata Motors moved to an intraday high following reports that the company plans to introduce armored versions of its car and light commercial vehicle models next year. Mahindra & Mahindra was also up on news that the company has won an award from a Nigerian province to supply 250 tractors.
