Sensex gains 733 points

Volatility characterized trading on the bourses, last week, due to alternate bouts of buying and selling. The key indices managed strong gains. Capital goods and banking stocks were the star performers, while FMCG stocks were the worst performers.

The 30-share BSE Sensex gained 733.06 points, or 3.81% to 19,976.23 and the broader based S&P CNX Nifty gained 230.01 points, or 4.03% to 5932.40 in the week ended Friday, 2 November 2007.

Among sectoral indices, BSE Capital Goods index jumped 1,846.26 points, or 9.96% to 20,386.41 in the week. The BSE Banking index or Bankex rose 968 points, or 9.42% to 11,241.53. The BSE FMCG index dropped 66.70 points, or 3.13% to 2,062.04 in the week.

The BSE Mid-Cap index moved up 101.14 points, or 1.28% to 8,021.80 in the week, while the BSE Small-Cap index climbed up 191.48 points, or 2% to 9,742.43.

At its mid-term monetary policy review, RBI raised banks’ cash reserve ration (CRR) by 50 basis points on Tuesday, 30 October 2007 to drain out excess cash and keep inflation low. The move, which will take effect on 10 November 2007, will drain around Rs 16000 crore from the banking system. RBI kept bank rate, repo rate and reverse repo rate unchanged.

As anticipated, the US Federal Reserve lowered its key rate – the Fed funds rate - by a quarter-percentage point to 4.5%, on Wednesday, 31 October 2007. The move comes little over a month after the US central bank cut rates by 50 basis points, which resulted in a surge in foreign money into India with market scaling new high.

On Monday, 29 October 2007, Sensex hit 20,000 mark for the first time in its history in intra-day trade. On that day, it ended up 734.50 points or 3.82% to 19,977.67 and the broader based S&P CNX Nifty ended up 203.6 points, or 3.57%, to 5,905.90.

On Tuesday, 30 October 2007, selling towards the end of the session resulted in Sensex shedding 194.16 points or 0.97% to 19,783.51. Traders resorted to profit taking ahead of the US Fed meeting. Auto and banking stocks edged lower after Reserve Bank of India’s CRR hike announced on that day.

On Wednesday, 31 October 2007, the market went into a correction mode quickly after the opening bell, but recovered later despite weak global cues. The 30-share BSE Sensex ended with a gain of 54.48 points, or 0.28%, to 19,837.99. The broader based S&P CNX Nifty was up 31.9 points, or 0.54%, to 5,900.65.

On Thursday, 1 November 2007, profit booking saw key indices close lower. Most sectoral indices ended in the red, except the Bankex and BSE Capital Goods Index. Market opened a strong note after the Fed rate cut announcement, but lost ground later. The 30-share BSE Sensex ended with a loss of 113.64 points, or 0.57%, to 19,724.35. The broader based S&P CNX Nifty was down 34.2 points, or 0.58%, to 5866.45.

On Friday, 2 November 2007, from a sluggish start to a strong finish, Indian equity indices showed their courage by outperforming global peers in a late rally. The BSE-30 share Sensex ended the day with a gain of 252 points or 1.28% at 19,976.23. The broader based S&P CNX Nifty was up 65.95 points, or 1.12%, to 5932.40.

Last week’s major gainers from the Sensex pack were Oil & Natural Gas Corporation (ONGC) (up 18.17% to Rs 1366.10), Larsen & Toubro (15.07 % to Rs 4461.05), ICICI Bank (12.34% to Rs 1330.60) and Bharat Heavy Electricals (Bhel) (11.66% to Rs 2715.25).

Hindustan Unilever (down 10.04% to Rs 195.75), Bharti Airtel (9.93% to Rs 894.85), Maruti Suzuki (13.54% to Rs 1021.30) and Hindalco Industries (3.18% to Rs 187.50) were the major losers from the Sensex pack.

Bharat Heavy Electricals (Bhel)’s net profit jumped 91% to Rs 687.66 crore on 18.70% growth in net sales to Rs 3965.36 crore in on Q2 September 2007 over on Q2 September 2006.

Larsen & Toubro’s net profit surged 72.95% to Rs 348.02 crore on 43.54% rise in total income to Rs 5,523.27 crore in Q2 September 2007 over Q2 September 2006. International revenue constituted 17% of the gross total revenue during the quarter.

National Thermal Power Corporation (NTPC)’s net profit rose 30.60% to Rs 1925.50 crore on a 3.80% increase in net sales to Rs 8016.90 crore in Q2 September 2007 over Q2 September 2006.

State Bank of India reported 36.04% rise in net profit to Rs 1611.42 crore 33.42% increase in total income to Rs 13658.22 crore in Q2 September 2007 over Q2 September 2006.

Maruti Suzuki India’s net profit rose 26.95% to Rs 466.50 crore on 32.99% rise in sales to Rs 4547.37 crore in Q2 September 2007 over Q2 September 2006.

Power Grid Corporation of India reported net profit to Rs 371.22 crore on total income of Rs 1108.10 crore in Q2 September 2007. Figures for corresponding previous year period were not available.

Neyveli Lignite Corporation (NLC)’s net profit rose 40.98% to Rs 231.04 crore on 20.19% increase in total income to Rs 882.08 crore in Q2 September 2007 over Q2 September 2006.

Tata Power Company (TPC) reported 27.23% rise in net profit to Rs 257.43 crore on 15.95% increase in total income to Rs 1482 crore in Q2 September 2007 over Q2 September 2006.

Steel Authority of India (Sail) posted 17.84% rise in net profit to Rs 1700.24 crore on 7.98% rise in total income to Rs 9467.75 crore in Q2 September 2007 over Q2 September 2006.

Bharti Airtel’s net profit rose 82.26% to Rs 1619.15 crore on 44.94% rise in sales to Rs 6059.89 crore in Q2 September 2007 over Q2 September 2006.

Circuit Systems (India) debuted at Rs 42 on BSE on Friday, 2 November 2007, a premium of 20% over IPO price of Rs 35. The stock settled at Rs 43.50 on that day, a premium of 24.28% over the IPO price. The company had come out with a fixed priced IPO in late September 2007-early October 2007. Circuit Systems (India) is into manufacturing of rigid printed circuit board (PCB), a key electronic component.

Department of Telecommunications (DoT), on Thursday, 1 November 2007, accepted Telecom Engineering Centre's report that has suggested tough norms for spectrum allocation to GSM operators. A move that may make it difficult for cellular players like Bharti Airtel, Vodafone and Idea cellular to get additional frequency.

National Stock Exchange, on Tuesday, 30 October 2007, announced changes its key index viz. the S&P CNX Nifty. Cellular services firm Idea Cellular and oil exploration firm Cairn India are the new entrants in the index. The two outgoing scrips are MTNL and HPCL. These changes come into effect from 12 December 2007.

Annual inflation, based on the wholesale price index (WPI), moved down 3.02% in the week ending 20 October 2007 over 3.07% in the week ending 13 October 2007.