Sensex gains 26 points, Nifty adds 34 points

The market edged higher in a truncated trading week. Select side-counters were in demand, either due to their strong Q4 results or on expectations of good earnings.

The 30-share BSE Sensex rose 25.69 points to 13934.27 in the week ended 4 May. The S&P CNX Nifty advanced 33.85 points to 4117.35 in the week.

Small-cap and mid-cap stocks extended their recent gains. BSE Mid-Cap Index rose 129.63 points to 5863.16 in the week. BSE Small-Cap Index rose 90.09 points to 7031.57 in the week.

The two key indices Sensex and S&P CNX Nifty witnessed a divergent trend on Monday (30 April). While the Sensex shed 36.21 points to end on 13,872.37, Nifty rose 4.40 points and settled at 4,087.90. However, the highlight of the trading session was a tremendous intra-day rebound by both. The Sensex reverted from the lower level after having plunged as many as 214.99 points in mid-morning trade.

The market remained closed on Tuesday (1 May) and Wednesday (2 May) on account of public holidays.

Renewed buying in Reliance Industries (RIL) took Sensex up 206 points on Thursday (3 May). Rallying US markets and firm Asian markets aided rally on domestic bourses.

A fall in RIL, caused by an unfavourable interim order of the Bombay High Court, pulled the barometer BSE Sensex below the psychologically important 14,000 mark on Friday (4 May). IT pivotals also edged lower, hit by the rupee’s surge. The domestic bourses bucked a firm trend in Asian stocks. Sensex lost 143.94 points to finish at 13,934.27.

FIIs pressed sales to the tune of Rs 304.60 crore on Monday (30 April) but they resumed buying on Thursday (3 May) with an inflow of Rs 56.20 crore. Mutual funds were net buyers to the tune of Rs 71.30 crore on Monday and Rs 298 crore on Thursday.

Finance Minister P Chidambaram on Thursday announced changes in the Finance Bill 2007-08, following a discussion in Parliament. Chidambaram said the government will charge an ad valorem duty of 12% on cement priced above Rs 190 per 50 kg bag as against the budget proposal of Rs 600 per tonne. After this 12% duty, the effective reduction in tax burden on cement sold above Rs 190 per bag would be up to Rs 7, Chidambaram said during the debate on Finance Bill 2007-08 in the Lok Sabha.

The import duty on jems & jewellery has been completely abolished and duty on cut diamonds abolished. The export duty on low-grade iron ore export was slashed to Rs 50 per tonne from Rs 300 per tonne.

The Finance Minister also recast the tax on Employee Stock Options (ESOPs). Fringe Benefit Tax will now be applicable on date of vesting. Guidelines will be issued in due course on how to arrive at the value of ESOPs. The Lok Sabha on Thursday passed the Union Budget 2007-08 by a voice vote.

Cement shares rose ahead of excise duty relief announced by the government on Thursday. ACC said on Friday its shipments rose 4.8% in April 2007 from a year earlier, to 1.74 million tonnes. ACC said production rose 6.6% to 1.77 million tonnes, up from 1.66 million tonnes in April 2006.

ONGC came of lower level on renewed buying at declines. Analysts say rising rupee against the dollar, which makes import cheaper will help bring down under-recoveries of oil marketing firms, which, in turn, will reduce the subsidy burden on ONGC. The state-run oil explorer shares subsidy burden on this count with oil marketing firms

Bajaj Auto (BAL) surged 4% to Rs 2551.05 on Thursday boosted by a media report that its board meeting on 17 May 2007, is also likely to discuss a proposal for demerger. Meanwhile, Bajaj Auto continued its downward spiral in motorcycle sales for the third consecutive month this year, with its April numbers, including exports, declining by 13% compared to the same month last year. The company said its bike sales in April stood at 1,64,304 units against 1,88,518 units (inclusive of exports) in the same month last year, down 13%. Total two-wheeler sales also registered a dip of 13% at 1,65,692 units against 1,90,964 units last year, BAL said.

ICICI Bank lost 7.2% to Rs 865.90 on Monday after the private sector bank reported disappointing 4.45% net profit growth for Q4 March 2007. Concerns of equity dilution also weighed on the counter. Along with Q4 results, ICICI Bank’s board also approved raising additional equity capital by way of a public issue of shares and American Depositary Shares (ADSs). The exercise is expected to generate around Rs 20000 crore. The approval of shareholders will be sought by postal ballot, the private sector bank said.

Colgate-Palmolive India jumped 12.7% to Rs 396.45 in a single trading session on Friday after the toothpaste and grooming products maker proposed a reduction in capital, resulting in payment of deemed dividend of 9 rupees a share to shareholders and reducing face value of each share to 1 rupee from 10 rupees.

IFCI surged ahead of its Q4 March 2007 results. IFCI reported a net profit of Rs 644 crore for the quarter ended 31 March 2007 against a loss of Rs 105 crore in Q4 March 2006. For the year ended 31 March 2007, its net profit was Rs 874 crore. The results were announced after trading hours on Thursday.

Index complier MSCI rejigged its Standard Index Series following an annual review. With regard to India, three stocks have found place in the Standard Index Series viz. Aditya Birla Nuvo, Unitech, and Videocon Industries. Simultaneously, ten stocks have moved out viz. Arvind Mills, Bajaj Hindusthan, Bank of Baroda, Biocon, Britannia Industries, Colgate-Palmolive India, Jet Airways India, Matrix Laboratories, Moser Baer India and Nicholas Piramal.

The outcome of the ongoing seven-phased Uttar Pradesh assembly elections, is a key political event to watch out for. The assembly poll gets over early this month. The vote is seen as a barometer of national political trends. Some opinion polls show the opposition Bharatiya Janata Party (BJP) emerging second in the race, further adding to the woes of the ruling Congress, which is already battling rising prices.