Sensex garners 602 points

The market witnessed a strong upward momentum on expectation that the US Federal Reserve will cut the Fed funds rate by at least 25 basis points at its meeting on Tuesday, 11 December 2007. Stocks rose across global markets as data showing strong job creation by the US private sector in November 2007 eased US recession worries. US recession worries continued to ease after after a plan announced by President George W Bush to stem US home foreclosures. BSE Sensex gained in 4 out of the 5 trading sessions in the week.

The 30-share BSE Sensex rose 602.81 points or 3.11% to 19,966 in the week ended 7 December 2007. The S&P CNX Nifty gained 211.55 points or 3.67% to 5,974.30 in the week.

BSE Small Cap index surged 816.25 points or 7.75% to 11,342.27 in the week. BSE Mid Cap index rose 468.40 points or 5.48% to 9,021.96 in the week.

The Sensex rose 240.22 points or 1.24% to 19,603.41 on Monday, 3 December 2007. Strong buying interest in some index pivotals including Reliance Industries boosted the bourses. IT pivotals, Wipro, TCS and Satyam Computer edged higher. Reliance Energy spurted. The market breadth was strong. Last week's sharp fall in global crude oil prices supported the rally on the bourses. The BSE Small-Cap and BSE Mid-Cap indices outperformed the Sensex.

The BSE Sensex lost 73.91 points or 0.38% to 19,529.50 on Tuesday, 4 December 2007. The market edged lower led by fall in index heavyweights Reliance Industries and ICICI Bank. Select IT stocks weakened. Tata Steel soared. Metal, consumer goods and auto stocks were in demand.

The BSE Sensex rose 208.57 points or 1.07% to 19,738.07 on Wednesday, 5 December 2007. After remaining range bound in afternoon trade, the market firmed up in late trade as European markets, which opened after Indian markets, started on a firm note. ICICI bank surged in late trade. Reliance Industries firmed up. Banking, oil & gas and realty stocks were in demand. IT stocks edged lower. Buying continued in small-cap and mid-cap shares, which have been rising since the past few days. Market breadth was strong.

The BSE Sensex rose 57.80 points or 0.29% to 19,795.87 on Thursday, 6 December 2007. Though the market ended in the green, it came off higher level as index heavyweight Reliance Industries slipped. Volatility on the bourses was high. ICICI Bank edged higher. Cipla surged. Consumer durables stocks dwindled. Realty stocks were the star performers in today’s trade. Market breadth was strong. European markets, which opened after Indian markets, were trading firm. Key Asian indices, except China, were in green.

The BSE Sensex rose 170.13 points or 0.86% to 19,966 on Friday, 7 December 2007. Data showing slide in inflation helped the market end the choppy session on a firm note but fall in index heavyweight Reliance Industries capped the rise. Infosys Technologies and ICICI Bank spurted. IT, banking and realty stocks were in demand. Market breadth moved between positive and negative. 16 out of 30 stocks from the Sensex pack were in the red. European markets, which opened after Indian market, were firm in early trade.

Bajaj Auto shed 0.22% to Rs 2,703.15 on reports it may take a majority stake in Austria’s sports bike maker KTM Power Sports. On 2 December 2007, Bajaj Auto increased its stake in KTM Power Sports from 14.5% to 18.8%. In November 2007, Bajaj Auto had picked up a 14.5% stake in KTM Power Sports for around Rs 300-350 crore from open market purchases.

India's largest private sector entity by market capitalisation and oil refiner Reliance Industries (RIL) declined 0.32% to Rs 2,841.85 after the company said it has signed a memorandum of understanding with Gail (India) for joint co-operation in petrochemicals. As per the memorandum of understanding (MoU), GAIL India and Reliance Industries (RIL) would explore opportunities for setting up petrochemical complexes outside of India in feedstock rich countries. GAIL and RIL will set up a special purpose vehicle (SPV) for setting up petrochemical complexes abroad.

Auto major and India’s largest commercial vehicle maker by sales Tata Motors rose 5.15% to Rs 771.10. Its total sales slipped 4% to 46,947 units in November 2007 over November 2006.

India’s largest carmaker by sales Maruti Suzuki India rose 2.95% to Rs 1,042.25 after its sales rose 26.6% to 69,699 units in November 2007 over November 2006.

India's second largest power utility by revenue Reliance Energy jumped 11.16% to Rs 1,932.10. The company's board of directors at its meeting held on 2 December 2007 approved proposal to raise upto Rs 8,000 crore through a preferential offer at Rs 1,812 per share to promoters and institutions. Reliance Energy (REL) said the new equity capital infusion will substantially enhance the net worth, and further augment its borrowing capabilities, to enable greater participation in mega growth opportunities in high growth areas. Meanwhile, Reliance Power, a 50% owned subsidiary of REL reportedly received a Letter of Intent for setting up a 4,000 mega watt ultra mega power project in Andhra Pradesh.

India’s second largest listed telecom service provider by sales Reliance Communications rose 8.81% to Rs 734.30 after the Department of Telecommunications (DoT) on Thursday, 6 December 2007 awarded a pan-India GSM licence to the company.

ICICI Bank (up 5.51% to Rs 1,247.50), Infosys (up 7.11% to Rs 1,718.15), Larsen & Toubro (up 3.21% to Rs 4,261.35), State Bank of India (up 5.93% to Rs 2,436.60), HDFC (up 4.9% to Rs 2,920.90) , DLF (up 7.15% to Rs 1,011.35) were other major gainers from the Sensex pack.

The term-lending institution IFCI surged 6.71% to Rs 100.95 on reports International Finance Corporation will pick up stake in the term lending institution. International Finance Corporation (IFC), the investment arm of World Bank, is likely to hold less than 20% stake in IFCI. IFCI needs funds to meet its capital adequacy requirements.

Essar Steel galloped 43.9% to Rs 67.85 after the Securities Appellate Tribunal (SAT) kept the company's delisting proposal in abeyance. SAT came out with an interim order on Wednesday, 5 December 2007, after an investor moved the authority alleging that the discovered price of the share for delisting was below the intrinsic value of the company. SAT has directed Essar Steel to file its response in this regard. The matter will come up for hearing on 12 December 2007.

Cement shares pared gains after the government on 4 December 2007 warned that it will crack down on the cement industry if it detects any cartelisation in the sector.

Securities Exchange Board of India (Sebi) on 3 December 2007, relaxed guidelines for companies raising funds through the issue of bonds. The requirement for corporates to obtain credit ratings from two agencies has been relaxed to one agency. This relaxation would reduce the cost of issuance of debt instruments, the regulator said. Sebi has also decided to allow issue of bonds below the investment grade. The regulator also decided to remove structural restrictions currently placed on debt instruments such as those on maturity and put or call option on conversion.

Meanwhile, the market regulator on, 5 December 2007, passed an order disposing the adjudication proceedings against Indiabulls Securities in the IPO-demat scam.

At the sidelines of the India Economic Summit 2007 on 3 December 2007 commerce secretary Gopal Krishna Pillai announced that the government may lift the cap of 5,000 hectares for multi-product special economic zones (SEZs) in view of the new Relief and Rehabilitation Policy and the proposed amendments to Land Acquisition Act.

Merchandise exports gained 36% to US$ 13.3 billion in October 2007 over US$ 9.80 billion in October 2006. Exports exports jumped 25% to US$ 130 billion in April-October 2007 over US$ 70.7 billion in April-October 2006. Imports rose 24.55% to US$ 20.8 billion in October 2007 compared with US$ 16.7% billion in October 2006. It gained 25.26% to US$129.9 billion in April-October 2007 from US$ 103.7 in April-September 2006. Trade deficit widened to US$ 7.48 billion in October 2007 compared with US$ 6.92 billion in October 2006. It touched US$ 4.4 billion in April-October 2007 over US$ 32.9 billion April-October 20

Speaking at the India Economic Summit in new Delhi on 4 December 2007, Deputy Chairman of the Planning Commission Montek Singh Ahluwalia estimated that India would require an investment of US$ 500 billion in infrastructure in the Eleventh Five Year Plan (2007-2012).

Global rating agency Standard and Poor's outlook for Asia-Pacific financial market for 2008 observed that the Reserve Bank of India's (RBI) tight monetary policy is expected to moderate India's economic growth rate to 8.1%-8.6% in 2008 as against 8.5%-9% in 2007.

The tussle over the Indo-US nuclear deal continued in a nine-and-a-half-hour debate in the Rajya Sabha. The debate which was initiated by Communist Party of India-Marxist (CPI-M) leader Sitaram Yechury on 4 December 2007 resulted in a walk-out of by the members of the opposition BJP, Left and the Third front External affairs minister Pranab Mukherjee staunchly defended the 123 agreement argued that India's foreign policy is independent of the deal and the country would be bound only by the 123 Agreement and not by the Hyde Act . He noted that the crux of the debate was whether India could conduct nuclear tests, he clarified a decision in this regard will be taken on the basis of the geo-political scenario. In the 123 Agreement nuclear tests has not been banned.

The spectrum committee meeting at the Department of Telecommunications (DoT) on 6 December 2007 remained inconclusive. The body is scheduled to meet on 10 December 2007 to deliberate on the norms for allocation of spectrum. The debate involves two sets of norms - recommendation of the Telecom Regulatory Authority of India (TRAI) and that of the Telecom Engineering Centre (TEC). The TRAI criteria is tougher than the current allocation norms, but the TEC specifications are even more stringent.