Sensex vaults 894 points on global recovery

Strong US economic data, hopes that US Federal Reserve will cut the key interest rate and FII and mutual fund buying triggered a solid rebound on the domestic bourses last week. BSE Sensex rallied on all the 5 trading sessions this week.

BSE Sensex rose 893.73 points or 6.2% to 15,318.60 in the week ended 31 August 2007. S&P CNX Nifty rose 273.85 points or 6.53% to 4464 in the week.

Major sectoral indices such as BSE IT index (up 4.02% or 177.18 points to 4585.66), Capital Goods index (up 6.36% or 802.51 poits to 13,424.74), BSE Auto index (up 6.76% or 308.79 points to 4,878.05), BSE Midcap (up 417.97 points or 6.75% to 6608.42), BSE small cap (up 6.99% or 525.59 points to 8060.52), surged.

The Sensex surged 417.51 points or 2.89% at 14,842.38 on Monday, 27 August 2007. The momentum was derived from the rally on Wall Street on Friday, 24 August 2007, triggered by surprisingly strong data on US home sales and durable goods. Also short covering ahead of the expiry of derivatives contracts for August 2007 series aided the market's rise.

The BSE Sensex gained 76.81 points or 0.52% at 14,919.19 on Tuesday, 28 August 2007. The market settled with decent gains as buying emerged for index pivotals. IT pivotals led the rally along with index heavyweight Reliance Industries (RIL). Yet, weak global markets capped upside. On the flip side, value buying coupled with short covering provided support at lower level.

The BSE Sensex advanced 73.85 points or 0.50% at 14,993.04 on Wednesday, 29 August 2007. The market staged comeback from day’s low touched in early trade following drop in US stocks overnight driven by credit concerns. The market rebounded on value buying coupled with short covering in derivatives market.

The BSE Sensex rose 128.70 points or 0.86% at 15,121.74 on Thursday, 30 August 2007. The market settled with gains for the fourth straight session on continued buying demand for index pivotals. It saw volatile swings in fag session of day, after staying firm throughout the day.

The BSE Sensex surged 196.86 points or 1.3% to 15,318.60 on Friday, 31 August 2007. The market rallied for the fifth straight session, as investors flocked to index pivotals. Data showing robust GDP growth in the April-June 2007 quarter, declining inflation, easing of political worries and firm Asian & European markets boosted sentiment. All the sectoral indices on BSE posted gains.

State Bank of India (SBI) rose 9.09% to Rs 1599.50 in the week. It has started the consolidation process with its associate banks by deciding to merge its wholly-owned subsidiary State Bank of Saurashtra (SBS) with itself. SBS is the smallest of the seven associates banks. The boards of both SBI and SBS have given approval to the merger proposal on 25 August 2007.

India's largest thermal power generator by revenue NTPC was up 5.8% to Rs 173.70 in the week on reports the government plans to sell 4.75% holding in the firm through follow-on public issue. The proposed sale is aimed at increasing the free float of NTPC's shares in the market and help improve the company's valuation.

India's top truck maker, Tata Motors was up 6.72% to Rs 701.85 in the week after chairman Ratan Tata confirmed on Friday, 24 August 2007 that Tata Group is interested in acquiring Jaguar and Land Rover from their parent, Ford.

India's largest private sector steel manufacturer Tata Steel gained 18.43% to Rs 689.70 in the week on reports it is targeting to more than double production by 2015. Tata Steel recorded a consolidated net turnover of Rs 31,155 crore for Q1 June 2007, an increase of 442% over the same period last year, on the back of Corus acquisition.

Take Solutions debuted at Rs 876 on 27 August 2007, a premium of 20% over the IPO price of Rs 730. It settled at Rs 926.50 on the BSE, a premium of 26.91% over the IPO price of Rs 730

K P R Mill debuted at Rs 201.20, a discount of 10.57% over the IPO price of Rs 225 on 28 August 2007. It settled at Rs 173.50 on the BSE, a discount of 22.89% over IPO price of Rs 225.

Puravankara Projects debuted at Rs 399, a discount of 0.25% over the IPO price of Rs 400 on 30 August 2007. It ended at Rs 361.75 at 10:00 IST on BSE, a discount of 9.56% over the IPO price of Rs 400.

The Confederation of Indian Industry (CII) on 27 August 2007 appealed to Uttar Pradesh (UP) goverment to reconsider the decision to close the Reliance Fresh stores in the state. CII fears that it will be detrimental to the pace of inclusive growth of the country.

BSE decided to shift 197 stocks back to normal rolling settlement from trade-to-trade segment, effective from Friday, 31 August 2007. The stocks transferred back to normal rolling settlement from trade-to-trade segment include Adhunik Metaliks, Advani Hotels & Resorts, Andrew Yule & Company, Autolite (India), Bank of Rajasthan, Cable Corporation of India, Cinevistaas, FCI OEC Connectors, among others. A total of 276 scrips will remain in trade-to-trade segment on BSE, from 31 August 2007.

The Reserve Bank of India (RBI) posted a discussion paper on its web site on Monday (27 August 2007) to review aspects of bank and financial holding company structures and how suitable they are for India. The intermediary holding company, being a non-banking finance company, is not fully regulated by RBI. Therefore, RBI said, a proper legal framework needs to be created before such structures are floated to ensure that no unregulated entities are present within the structure.

Bombay Stock Exchange (BSE) acquired 5% stake in Calcutta Stock Exchange (CSE) on 29 August 2007 for Rs 60 crore as part of the corporatisation of the regional exchange. BSE bought stake at Rs 2000 per share. CSE has been valued at Rs 1200 crore based on the BSE purchase value.

The Indian government has decided to form a panel to study the Indo-US nuke deal, taking into account objections from communist parties. The announcement came after a meeting between senior government leaders and their communist allies, on Thursday 30 August 2007. The Communist Party of India (CPI) had demanded that the goverment must form a mechanism to address their concerns pertaining to the deal

India's gross domestic product (GDP) rose 9.3% in the quarter ended June 2007 (Q1 of FY 2008) as against 9.6% in Q1 of FY 2007.

Inflation dipped 3.94% in the week ending 18 August 2007 as against 4.10% in the week ending 11 August 2007.

The government on Thursday, 30 August 2007 approved an initial public offering of 10% of new equity in Oil India (OIL) and the preferential allotment of 10% of the exploration firm's current equity to three state-run refiners. The cabinet also approved the issue of 1% of shares to employees.