Sensex garners 305 points

The market surged last week despite liquidity concerns arising from the mega follow-up public offer of ICICI Bank. The FPO was subscribed a good 11.38 times. The issue opened for subscription on Tuesday, 19 June 2007 and closed on Friday, 22 June 2007.

The BSE 30-shares Sensex rose 304.65 points or 2.15% to 14,467.36, while the S&P CNX Nifty gained 80.6 points or 1.93% to 4,252.05 in the week ended 22 June 2007.

Trading for the week started on a bearish note with the Sensex declining 82.57 points to 14,080.14, on Monday, 18 June 2007. The latest circular issued by the Central Board of Direct Taxes (CBDT) on Friday, 15 June 2007, failed to provide the much-needed clarity with regard to tax on profit/gain arising from sale of shares.

Sensex surged 215.36 point at 14,295.50, on Tuesday, 19 June 2007, boosted by short covering and buying in index pivotals. The sentiment was also boosted further by reports that advance tax paid by companies and individuals were up 28.6% for the April-June 2007 period, from a year earlier, which in turn raised hopes of robust corporate earnings in the period.

The BSE index gained 116.45 points to 14,411.95, on Wednesday 20 June 2007, with shares from auto, banking, cement and metal leading the rally

The upmove continued for the third straight day, as the Sensex rose 87.29 points to 14,499.24, on 21 June 2007. Shares from the capital goods sector were in demand.

The three day rally fizzled out on 22 June 2007, with the Sensex slipping 31.88 points at 14,467.36, in highly volatile trade.

Reliance Industries (RIL) rose 1.43% to Rs 1704. As per reports, global oil giants including Shell, Exxon and Chevron are eyeing a stake in Reliance Industries’ overseas oil & gas assets. RIL recently hived off these assets into a separate company called Reliance Exploration and Production DMCC.

Meanwhile, the Bombay High Court’s in its interim order issued on Thursday, 21 June 2007, said RIL cannot sell the gas to be produced from one of its prime blocks in the Krishna-Godavari basin to any third party other than Anil Ambani’s Reliance Natural Resourses (RNRL) and NTPC. In the interim order on a petition filed by RNRL, the Bombay High Court said that the 81.6 million cubic metres of gas per day (mmscmd) is to be earmarked for RNRL, NTPC or for RIL’s captive use for the next eight years.

Bank stocks were in demand. State-run banking major State Bank of India (SBI) gained on its plans to raise $225 million from the overseas market this year by issuing perpetual bonds. The bank plans to raise a total of Rs 15,000 crore this year in the form of equity (tier-I) and debt (tier-II).

ICICI Bank also rose on strong response for its follow-on public issue. The price band for the issue was Rs 885 to Rs 950 per equity share. Retail bidders would be allotted shares at a discount of Rs 50 per share to the issue price determined by the book-building process. The public issue opened for subscription on Tuesday, 19 June 2007, and closed on Friday, 22 June 2007. The issue size is Rs 8,750 crore. The issue including the green shoe option aggregates to Rs 10,062.5 crore.

Engineering & construction major L&T gained after company’s joint venture won an order worth Rs 610 crore for a residential building project in Dubai. The project is to be completed in 660 days from the date of commencement. L&T also signed a $95-million shipbuilding contract with Netherland's BigLift.

State-run engineering major Bharat Heavy Electrical (Bhel) also moved higher after it bagged a Rs 139-crore contract from NTPC for supplying and commissioning of 27 transformers on 19 June 2007.

Reliance Energy (REL) galloped. REL is one of the five qualified bidders to have submitted bids for the 4,000-mega watt Sasan ultra mega power project. The Lanco Infratech-Globeleq Singapore consortium had won the bid for the Sasan project after outbidding eight companies by quoting the lowest tariff of Rs 1.19 per unit. However, the project became controversial after Prince Stone Investments, the Mauritius-based holding company of Lanco, and Jindal Steel & Power together acquired Globeleq Singapore in February 2007.

Aditya Birla group’s aluminium and copper major Hindalco Industries edged up on market speculation that promoters are hiking their stake from the open market.

IT pivotals settled with losses, as the rupee gained strength. Frontline pivotals, Infosys, Satyam Computers, TCS and Wipro, all settled lower.

Glory Polyfilms settled at 28.85% premium at Rs 61.85 on BSE over IPO price of Rs 48, on 18 June 2007. The Glory Polyfilms stock made its debut at premium at Rs 50 on BSE. The scrip touched a high of Rs 84 and a low of Rs 50 during the day.

On 19 June 2007, Decolight Ceramics settled at Rs 44.50 on BSE, a discount of 17.5% over IPO price of Rs 54. The scrip debuted at Rs 57 on BSE, touched a high of Rs 65.90 and low of Rs 43.50.

On the same day, HTMT Global Solutions (HGSL) settled at Rs 583, compared with a base price of Rs 800 on its debut, 19 June 2007 following a restructuring scheme of Hinduja TMT (HTMT).

India's wholesale price index rose 4.28% in the 12 months to 9 June 2007, lower than the previous week's increase of 4.80%, due to a decline in food prices, government data released on 22 June 2007 showed.