Sensex, Nifty strike record high

The market surged in the week ended Friday 14 December 2007 boosted by steady buying for index pivotals. Both the niche indices – BSE Sensex and S&P CNX Nifty struck lifetime highs during the week. Small and mid-cap shares surged on momentum buying. Strong Index of Industrial Production (IIP) and a 25 basis points rate cut by US Federal Reserve in US boosted the sentiment.

Global markets though were subdued during the week on disappointment that the US Federal Reserve cut interest rates a 25 basis point, not the more aggressive 50 basis point that some had hoped for.

The 30-share BSE Sensex rose 64.83 points or 0.32% to 20,030.83 in the week ended 14 December 2007. The S&P CNX Nifty gained 73.40 points or 1.22% to 6047.70 in the week.

The BSE Small-Cap index surged 853.23 points or 7.52% to 12,195.50 in the week. The BSE Mid-Cap index rose 449.98 points or 4.99% to 9,471.94 in the week. Both these indices outperformed the Sensex.

On 10 December 2007, the market edged lower as the political concerns resurfaced after communist allies warned the government against going ahead with a civilian US nuclear deal. The 30-share BSE Sensex shed 35.32 points or 0.18% to 19,930.68. The broader S&P CNX Nifty lost 13.7 points or 0.23% at 5,960.60.

On 11 December 2007, the market surged on renewed buying in blue chips in anticipation of the United States Fed rate cut. The 30-share BSE Sensex jumped 360.21 points or 1.81% to 20,290.89. The broader S&P CNX Nifty jumped 136.65 points or 2.29% at 6,097.25.

On 12 December 2007, the market surged on steady buying for index pivotals. The 30-share BSE Sensex rose 84.98 points or 0.42% to 20,375.87, a record closing high. The broader S&P CNX Nifty closed at an all time high of 6175.65 on that day.

On 13 December 2007, the market tumbled in the late trade following a sudden sell-off in blue-chip stocks, in sync with other markets across the globe. The 30-share BSE Sensex slumped 271.48 points or 1.33% to 20,104.39. It struck an all time high of 20,498.11 in early trade. The S&P CNX Nifty declined 101.2 points to 6,058.10. It also hit a record high of 6,185.40 in early trade.

On 14 December 2007, the market ended slightly lower in what was a highly volatile trading session, seeing series of gyrations in either direction. The 30-share BSE Sensex declined 73.56 points or 0.37% to 20,030.83. The S&P CNX Nifty declined 10.4 points or 0.17% to 6,047.70.

India’s largest private sector firm by market capitalisation and oil refiner Reliance Industries gained 1.67% to Rs 2889.05. As per reports, Reliance Industries (RIL) has struck a deal to explore uranium in Australia, as soaring demand and prices turn the heavy radioactive metal into a lucrative commodity. RIL, through its subsidiary RIL (Australia), has signed an agreement with Uranium Exploration Australia (UXA) to buy 49% in eight exploration blocks owned by the company in South Australia and Northern Territory, reports suggest.

Anil Dhirubhai Ambani Group (ADAG) led Reliance Energy (REL) fell 1.17% to Rs 1909.45 in the week. As per reports, ADAG will invest Rs 8,000 crore in REL that would help the company to double its net worth and increase its borrowing limit. The infusion is proposed through a preferential offer of shares to Reliance-Anil Dhirubhai Ambani Group. The preferential offer will be made at Rs 1,812 per share. After the equity infusion, the promoter’s stake will increase to 43-45% from the current 35.89%.

India’s largest listed cellular service provider by market share Bharti Airtel fell 0.74% to Rs 952.55 in the week after the telecom minister rejected its Rs 2,650 crore offer for 4.4 megahertz of additional spectrum.

Maruti Suzuki India rose 0.01% to Rs 1042.35 in the week. The company's domestic sales rose 24% to 65,216 units in November 2007 over November 2006. This is its highest ever monthly domestic sales.

ONGC rose 4.09% to Rs 1238.80 on reports that the overseas arm of the company and the Hinduja group were in talks to form a partnership with Switzerland-registered NICO, a unit of National Iranian Oil Company.

India's top tractor maker by sales Mahindra & Mahindra rose 1.37% to Rs 790.70 in the week. As per reports Mahindra & Mahindra’s (M&M’s) all-Indian utility vehicle, Scorpio, will enter the quality-conscious US market, which is also the largest in the world with 15 million vehicles in annual sales. The company already has firm orders for 45,000 units of Scorpio for the first year, which is more than the 40,000 it sold in India in the last financial year. More importantly, 285 US dealers have signed up to sell the vehicle and are investing $178 million in setting up sales and service outlets.

Diversified firm Videocon Industries spurted 17.06% to Rs 648.85. The scrip rallied on reports that the company is spinning off its energy business. According to reports, Videocon Industries plans to spin off its energy business, including coal fields in Indonesia and oil and gas blocks in Brazil, into a separate company called Videocon Natural Resources, and retain a substantial stake in the new firm.

Power producer and distributor Tata Power declined 1.72% to Rs 1300.95 in the week. The company is reportedly eyeing a bid for Singapore electricity companies Tuas Power, PowerSeraya and Senoko. The report suggests that Singapore's state investor Temasek Holdings is selling its interests in the three firms and Tata Power was evaluating the opportunity.

India’s second largest real estate firm by market capitalisation Unitech rose 11.52% to Rs 478.35 in the week. As per reports, Unitech has major plans, which look beyond real estate. After announcing its plans of entering the telecom business, Unitech now wants to concentrate on positioning itself as a full fledged infrastructure development company with interests in power, roads, airports and also in other areas wherever it sees an opportunity. Besides, it also plans to enter the international market.

India’s third largest real estate firm by market capitalisation Indiabulls Real Estate rose 7.69% to Rs 740.40 in the week. The company said on 10 December 2007, its wholly owned subsidiary, Indiabulls Wholesale Services (IWSL), is proposing to make an open offer for Piramyd Retail, a retail company.

The Index of Industrial Production (IIP) jumped 11.8% in October 2007 from 4.5% in October 2006. IIP stood at 9.7% in April-October 2007 compared with 10.1% in April-October 2006. Industrial output data for September 2007 was revised upwards to 6.8% from 6.4%.

Indian inflation jumped to its highest in 3 months as food and energy prices rose. The central bank is likely to keep its tight monetary stance with a possible hike in fuel prices to come. Annual inflation, based on the wholesale price index (WPI), climbed up 3.75% in the week ended 1 December 2007 from 3.01% in the week ended 24 November 2007.