Bulls take a breather

Indian markets seem to have wearied after 11 sessions of bull run starting from 18 September 2007. The market was first breached on Thursday, 4 October 2007 when a combination of profit-booking and slackness in global markets acted against the market uptrend. But bears were denied a convincing win in the weak ended on Friday, 5 October 2007 where the broad indices closed flat after a volatile trading session.

In the week ended Friday, 5 October 2007 Indian shares slid from their record high to close down just 0.02%, led lower by ICICI Bank. Oil & gas and capital goods shares were the major gainers. The benchmark BSE 30-share index edged down 3.78 points to end at 17,773.36, after rising to a record high of 17,979.18 in afternoon trade, with 23 stocks declining. The 50-share NSE index was down 0.44% at 5,185.85.

The BSE Sensex has risen 2.8% in a week. The Sensex hit an all-time high of 17,953.07 on Wednesday, 3 October 2007. Its 11-day rally was its longest run of consecutive gains in four years. The index is up 27.05% from a three-month closing low on 21 August 2007.

The S&P CNX Nifty has gained 3.27% in the week to. It hit an all time high of 5261.35 on Wednesday, 3 October 2007.

The BSE Mid-cap index has moved up 0.84% to 7,485.51, while the BSE Small-cap index rose 0.02% to 9,101.87 in a week. Both these indices under-performed the Sensex.

The week began on Friday 28 September 2007 with the market continuing its winning streak on the strong rollover of the September 2007 futures to October 2007 futures on the previous day boosting trading. The Sensex ended up 140.54 points, or 0.82%, to 17,291.10. The S&P CNX Nifty had settled higher 20.80 points, or 0.42%, to 5,021.35.

On Monday, 1 October 2007, the market came sharply off higher level in late trade after it had struck lifetime high in late afternoon trade. A sharp fall in Reliance Industries (RIL) pulled the market off higher level during the closing hours. On that day, the Sensex ended up 37.52 points, or 0.22%, to a fresh closing high of 17,328.62. The broader S&P CNX Nifty scored over the Sensex, ending up 47.6 points, or 0.95%, to a fresh closing high of 5,068.95.

On Wednesday, 3 October 2007, the market had surged amid volatile trade, with both the broad market indices, Sensex and Nifty, striking all-time highs. The Sensex closed up 518.42 points, or 2.99%, to 17,847.04, an all-time closing high. The Nifty was up 141.85 points, or 2.8%, to 5,210.80, an all-time closing high.

On Thursday,4 October 2007, the Sensex settled 0.39% , or 69.90 points, lower to 17,777.14, snapping eleven straight days of gains, led by losses in ICICI Bank and Housing Development Finance Corporation. The 50-share Nifty closed 0.04% down to 5,208.65 points. Banks shares fell on expectation the central bank will raise the CRR by 25 bps. The RBI meets on 30 October 2007 for a mid-term review of the monetary policy. But the market expects there could be action on the CRR before that.

ICICI Bank lost 2.48% to Rs 1036.80 in a week. The stock declined on fears that the central bank may raise cash reserve ratio for banks to remove excess liquidity from the money markets. ICICI bank reportedly plans to raise $11 billion overseas in the next 12 months to fund its expansion abroad and credit growth in India. ICICI Bank's target to raise funds totals $13 billion in the next 12 months, including $2 billion of bonds it sold on 26 September 2007. It will raise the money through loans, bonds, shares and overseas deposits.

State Bank of India (SBI) slumped 4.48% to Rs 1863.25 in the week. The bank is considering shelving its planned Rs 8000-crore to Rs 12000-crore rights issue, following a slowdown in credit growth. SBI was planning to boost its capital requirement to fund credit growth and its capital adequacy ratio, but slowing credit growth would free up a significant amount of capital and, therefore, not require raising further capital. The bank paid Rs 1054-crore advance tax in the second quarter of the year ending March 2008, from a year earlier.

Reliance Energy (REL) gained 20.05% to Rs 1477.15 in the week. Reliance Power, the subsidiary of REL, proposes to sell 130 crore shares with a face value of Rs 2 each in its IPO. The company filed its Draft Red Herring Prospectus with SEBI on Wednesday, 3 October 2007. The issue will constitute 11.5% of the company's equity capital. It includes promoters' contribution of 16-crore equity shares to be allotted at the IPO price. The remaining 114-crore shares will constitute the net issue to the public.

Tata Steel fell 2.05% to Rs 832.90 in the week. The company raised prices of rebar, a benchmark long product, for immediate delivery by as much as 2%, or Rs 600 ($15) a tonne to about Rs 26,600, from 4 October 2007. Other Indian steel makers, too, raised prices as demand increases in China and India. On Monday, 1 October 2007, state-run steel firm Steel Authority of India (Sail) had raised prices of its products by Rs 500-Rs 800 per tonne in line with rising input costs. Tata Steel paid Rs 445-crore advance tax in the second quarter from a year earlier. Sail paid Rs 900-crore advance tax in the second quarter from a year earlier.

Reliance Industries soared 8.17% to Rs 2483.90 in a week. The company has reportedly ended the services of about 400 franchisees for its planned retail business in the eastern state of West Bengal. The company also cancelled its retail plans in Orissa because of protests from small traders. RIL paid Rs 649 crore advance tax in the second quarter from a year earlier.

Maruti Suzuki grew 3.52% to Rs 1034.70 in a week. The Indian government has approved Maruti Suzuki's joint venture plan with Japan's Futaba Industrial Corporation for manufacturing auto parts. Futaba will hold a 51% stake for an initial investment of Rs 45.9 crore.

Oil and Natural Gas Corporation (ONGC) went up 0.85% to Rs 966.05 in the week. ONGC will spend Rs 5713 crore on the second phase of the redevelopment of a key field off India's west coast. The redevelopment will help ONGC's Mumbai High South field to produce 22 million tonnes of incremental oil. The company paid Rs 2401-crore advance tax in the second quarter from a year earlier.

The BSE IT index rose 2.59% to 4,740.27 this week despite the fact that rupee rose to its strongest level against the dollar since April 1998. The software companies earn nearly 60% of the revenue from the United States.