Market settles higher in event dominated week

The market posted gains last week amid volatile trade ahead of expiry of February 2008 derivatives contracts. The BSE Sensex posted gains for 3 out of 5 days, whereas the S&P CNX Nifty advanced for 4 out of 5 trading sessions. Small-Cap and Mid-Cap indices underperformed the Sensex.

The Finance Minister P Chidambaram proposed to hike the short term capital gains tax from 10% to 15% in Union Budget 2008-09 which he presented to the parliament on Friday, 29 February 2008. However there was no change in corporate tax and the rate of Securities Transaction Tax (STT), too, was kept unchanged. The finance minister said STT paid by the taxpayer will be treated like any other deductible expenditure against business income.

The general Centvat on all goods has been reduced to 14% from 16%. The peak customs duty was kept unchanged at 10%.

The Finance Minister (FM) announced changes in personal income tax slabs that will bring down tax liability of individual tax payers substantially. With an eye on parliamentary elections in 2009, FM also announced a package of a massive Rs 60000 crore of waivers of loans of farmers.

The 30-share BSE Sensex gained 229.65 points or 1.32% to 17,578.72, in the week ended Friday, 29 February 2008. The S&P CNX Nifty advanced 112.75 points or 2.20% to 5223.50, in the week.

The BSE Mid-Cap index rose 85.94 points or 1.13% to 7,680.39 in the week. The BSE Small-Cap index rose 32.72 points or 0.34% to 9,628.13 in the week. Both these indices underperfomed the Sensex.

Trading for the week started on an upbeat note with 30-share BSE Sensex gaining 301.50 points or 1.74% at 17,650.57 on Monday, 25 February 2008. The broader based S&P CNX Nifty was up 89.95 points or 1.76% at 5,200.70 on that day. Oil & gas and information technology stocks were in demand.

The 30-share BSE Sensex rose 155.62 points or 0.88% at 17,806.19 on Tuesday, 26 February 2008 after Railway Minister Lalu Prasad Yadav provided thrust on modernising rail infrastructure in Railway Budget 2008-09 which he presented to parliament on that day. The broader based S&P CNX Nifty was up 69.35 points or 1.33% at 5,270.05 on that day.

The key benchmark indices came off higher levels in late trade on Wednesday, 27 February 2008, to settle almost flat due to selling in IT and banking counters. The 30-share BSE Sensex rose 19.80 points or 0.11% at 17,825.99. The broader CNX S&P Nifty ended down 1.65 points or 0.03% at 5,268.40 on that day.

On Thursday, 28 February 2008, the barometer index BSE Sensex ended almost unchanged in volatile trade as derivative contracts for February 2008 series expired. The 30-share BSE Sensex ended down 1.51 points or 0.01% at 17,824.48. However, the broader CNX S&P Nifty was up 16.7 points or 0.32% at 5,285.1 on that day.

Market slipped in volatile trade on 29 February 2008 after finance minister announced a hike in short term capital gains tax to 15% from 10%, in Union Budget 2008-09. The 30-share BSE Sensex slipped 245.76 points or 1.38% at 17,578.72. S&P CNX Nifty declined 61.60 points or 1.17% to 5,223.50 on that day.

India’s largest private sector firm by market capitalization and oil refiner Reliance Industries rose 1.17% at Rs 2458.25 in the week. The company said on Tuesday, 26 January 2008 it had discovered more gas in an exploration block off India's east coast. This is the company's eight discovery in the block.

Maruti Suzuki surged 13.12% to Rs 867.20 and Tata Motors rose 0.80% to Rs 700.25 in the week. The government reduced excise duty on small cars to 12% from 16% and cut excise duty on hybrid cars to 14%, from 24%, in the Budget.

Farm equipment maker Mahindra & Mahindra advanced 10.18% to Rs 692.80. The Finance Minister proposed higher farm credit target in the Budget.

Banking shares edged lower during the week. ICICI Bank slipped 0.77% to Rs 1090.95 and State Bank of India lost 0.24% to Rs 2109.70

HDFC Bank declined 1.46% to Rs 1453.45 whereas Centurion Bank of Punjab slumped 12.85% to Rs 49.15 in the week. The swap ratio was fixed as 1 share of HDFC Bank for 29 shares of Centurion Bank of Punjab for the proposed merger of Centurion Bank of Punjab with HDFC Bank.

India’s largest cellular services provider in terms of market capitalisation Bharti Airtel fell 2.90% to Rs 825.60 and India's second biggest listed telecommunication services provider by sales Reliance Communications shed 1.25% to Rs 574.55 in the week.

India's second largest power utility firm by revenue Reliance Energy rose 0.76% to Rs 1567.75 in the week. The company said on 25 February 2008 that its board will meet on 5 March 2008 to consider, buy back of equity shares of the company.

NTPC, India's biggest power generation firm by revenue, advanced 1.95% to Rs 201.7 in the week on signing a loan agreement for 68.56 million euros with Nordic Investment Bank to part fund its capital expenditure.

Reliance Power rose 3.30% to Rs 430.60 after its board-approved issue of three bonus shares for every five held, to compensate for the slump in the stock price post listing.

The wholesale price index rose 4.89% in the 12 months to 16 February 2008, higher than the previous week's rise of 4.35%, government data showed on Friday, 29 February 2008.

Nifty saw a rollover of about 75% to March 2008 contracts from February 2008 contracts when February 2008 contracts expired on 28 February 2008. The market wide rollover was 72% to 73%.

Railway Minister Lalu Prasad announced a cut in freight rates by 5% on petrol and diesel in the Railway Budget for 2008/09. Fares for second class sleeper-class passengers were reduced by 5%. Yadav said Railways will invest Rs 75,000 crore to upgrade infrastructure over the next seven years. Indian Railways has a cash surplus of Rs 25000 crore in the 2007/08 financial year, Yadav added.

Crude oil touched a record high above $103 a barrel on Friday, 29 February 2008 after Ecuador shut a key export pipeline and a fire hit a major European natural gas plant, while the US dollar's fall to a series of lows kept fresh funds flowing in.