The market rallied during the week, as buying for index pivotals resumed, after a sharp fall on the back of a surprise hike in CRR announced on 8 December 2006, after completion of trading.
The BSE Sensex advanced 315.17 points for the week ended Friday (29 December 2006) to 13,786.91, while the S&P CNX Nifty rose 95.25 to settle at 3,966.40.
The market was closed on 25 December 2006 on account of Christmas.
The Sensex surged 236.60 points on 26 December 2006, to settle at 13,708.34, on strong buying in IT scrips anticipating robust December quarter results.
The Sensex gained a further 151.35 points to end at 13,859.69, on 27 December 2006, on account of short-covering ahead of the December futures contracts expiry (28 December 2006).
On 28 December 2006, the BSE Sensex slipped 13.35 points to 13,846.34, amid volatility at the close, due to expiry of December 2006 derivatives contracts.
The Sensex declined 59.43 points to 13,786.91, in late-trading on 29 December 2006, under selling pressure.
Infosys Technologies rose 3.27% to Rs 2,243, after it scheduled a board meeting on 11 January 2007, to consider Q3 December 2006 results. It is also believed to be in talks with ten global banks for its banking software – Finacle. Reports speculate big deals are likely to materialise in a couple of months. The company foresees big opportunity in the software replacement market in the US and Europe, apart from plans to enter the Latin American market. The company announces its Q3 December 2006 results on 11 January 2007.
Reliance Industries (RIL) gained 0.43% to Rs 1,270. It is reportedly planning an investment of Rs 5,000 crore for gassification of lignite in south Gujarat. The project will be a joint venture between (RIL) and Gujarat Mineral Development Corporation (GMDC). The private sector oil refiner is said to be negotiating with GMDC, and scouting for lignite reserves in south Gujarat.
ITC jumped 4.87% to Rs 176.35, after the FMCG major said it had struck an agro-alliance with Marubeni Corp, a Japanese trading house. Under the alliance, both companies will consider joint exports of Indian-made soyabean cake and maize grains for livestock feed, Marubeni said in a statement. The tie-up is aimed at expanding the trade of food and other agricultural products between India and Japan.
Dr Reddy’s Lab gained 0.87% to Rs 811, after it received final approval from the U.S. Food and Drug Administration for cholesterol-lowering simvastatin tablets. Simvastatin is the generic equivalent of Merck & Co. Inc.'s blockbuster drug Zocor.
Reliance Communications (RCL) rose 0.48% to Rs 470.60. It is examining the opportunity in mobile operator Hutchison Essar and a potential combination could create compelling value for all shareholders. Chairman Anil Ambani also told a news conference the company had received commitments from global bankers for financial support for any potential bid. Ambani said there was no certainty on the timing of a bid and declined to say how much the firm will offer, saying it will remain within a conservative limit. Meanwhile, RCL plans to invest $1.5 billion to expand capacity of its Flag Telecom submarine cable network.
State Bank of India rose 2.47% to Rs 1,245.35. It executed a 50 bps hike in prime lending rate to 11.5% with immediate effect.
Indiabulls Financial Services surged 12.82% to Rs 652. The company announced 9 January 2007 as a record date for its demerged real estate business, now under Indiabulls Real Estate (IREL). The stock will stay in the no-delivery period on BSE from 2 January 2007 to 8 January 2007, for the demerger.
On 28 December 2006, Ess Dee Aluminium settled at a premium, at Rs 238.75, compared to its IPO price of Rs 225 per share. The stock listed at Rs 260 on BSE.
XL Telecom settled at a discount, at Rs 136, compared to the issue price of Rs 150 per share. The stock listed at 18.06% premium, at Rs 177.10, on 28 December 2006.
On 29 December 2006, Nissan Copper settled at a sharp 230.25% premium at Rs 128.80 on BSE on high total volumes of 6.11 crore shares. The shares were issued at Rs 39 per share in the recently concluded IPO. The stock debuted at Rs 40 on BSE and hit a high of Rs 135.70, and dipped to a low of Rs 40 for the day.
The Reserve Bank of India permitted foreign investment up to 49% in stock exchanges, paving the way for New York Stock Exchange (NYSE) to expand into Asia's best performer.
The Reserve Bank of India also said that foreigners could hold up to 49% in depositories and clearing corporations.
Under the new rules, foreign direct investment will be limited at 26%, while foreign portfolio investments will be capped at 23% in all such entities, the central bank said. It, however, said portfolio investments will be allowed only through the secondary market. The stock exchange also plans to list shares on its own trading floor.
Media reports indicate the New York Stock Exchange is eager to pick up a stake in BSE.
The wholesale price index rose 5.43% in 12 months to 16 December, higher than the previous week's annual rise of 5.32% due to an increase in manufactured product prices, data showed on Friday (29 December). The annual inflation rate was 4.62% during the corresponding week of the previous year.
The market has ended calendar 2006 on a strong note, with the Sensex gaining 46.7% to settle at 13,786.91, which a less than 200 points off its all-time closing high of 13,972.03 of 7 December 2006. It had struck an all-time high of 14,035.30 on 6 December 2006. The S&P CNX Nifty gained 39.8% for the calendar year 2006. The market settled with gains for the fifth straight year. Banking, telecom, IT and cement shares hogged the limelight in 2006.
The Nikkei 225 index finished just 0.01% higher, at 17,225.83, on 29 December 2006. That marked its highest close since early-May. The benchmark ended 2005 at 16,111.43.