The market surged for the third consecutive week on account of falling crude oil price, strengthening of rupee, strong FII-buying and on expectations of robust results from corporate India. The market moved up as the US Federal Reserve kept interest rates unchanged at a meeting on Wednesday (21 September).
The market also rose on expectations that the RBI may keep short-term interest rates unchanged at its credit policy meeting next month.
The BSE Sensex gained 227.41 points, to finish on 12,236.78. The S&P CNX Nifty rose 65 points, to close at 3,544.
The BSE Sensex rallied on Monday, gaining 62 points on the back of strong FII inflows, and steady-to-firm Asian markets.
On Tuesday, the Sensex fell 101 points on profit-booking and on concerns over possible sales by hedge funds after US hedge fund Amaranth Advisors said on Monday (18 September) it may suffer billions of dollars in natural gas losses following a steep fall in price recently. Amaranth’s woes fuelled concerns that many other hedge funds could also have been hurt by the steep fall in crude oil and natural gas price, and has bred concerns that such funds may book profits in Indian equities, to make up for losses suffered in their energy related investments globally.
On Wednesday, the BSE Sensex jumped 139 points as crude oil prices fell below $61 a barrel.
On Thursday, the benchmark index rose 165 points, as investors stocked up equities ahead of the second quarter results and after the US Federal Reserve kept interest rates unchanged. Buoyant direct tax collections in the current fiscal also lifted the market as it indicated a rise in corporate profits. The centre’s gross direct tax collections registered a 33.5% growth in April-September 2006, to Rs 87,831 crore.
On Friday, the Sensex lost 37.49 points, taking cue from weak global markets.
FIIs invested to the tune of Rs 1,296.5 crore in equities in four trading sessions, from Monday to Thursday, while mutual funds offloaded Rs 15.76 crore worth of equities.
Engineering and construction major L&T was up 0.64% in the week, to close at Rs 2,656.75. Investors mopped up the scrip ahead of the record-date for a bonus issue. The company will allot bonus shares on 29 September 2006.
Cipla rose 2.1% in a week to close at Rs 260.15. Recently, it received tentative FDA approval for Lamivudine and Zidovudine, both anti-AIDS drugs.
Ranbaxy fell marginally by 0.06% in a week, to close at Rs 413.80. The pharma major has received approval from the US Food and Drug Administration to manufacture and market Furosemide Tablets 20 mg, 40 mg, and 80 mg.
FMCG giant Hindustan Lever rose 5.6% in a week, to close at Rs 257.25. The company has hiked prices by an average 3%, across portfolio over the last two months.
ONGC rose nearly 2% in a week, to close at Rs 1,184.45. The company’s foreign subsidiary and Sinopec, in joint venture, acquired Colombian oil assets of US-based Omimex Resources. Omimex has oil & gas operations exclusively in Colombia, which include onshore production and exploration areas with proven reserves of more than 300 million barrels of oil, and a current production of approximately 20,000 oil barrels per day.
Reliance Industries rose 1.2% in a week, to close at Rs 1,155.20. The company paid Rs 425 crore as advanced tax, in the second installment this year, compared to Rs 225 crore last year.
IT stocks were in demand this week. Satyam rose 1% in a week, to close at Rs 838, Wipro rose nearly 2% in a week, to close at Rs 519.55 and Infosys gained 1.1% in a week, to finish at Rs 1,830.10.
PSU power equipment manufacturer Bhel gained nearly 2%, to close at Rs 2,312.30. There were reports that it may acquire an IT company in the west, to enhance capacity and technological expertise. The company is reportedly said to have bagged Rs 1,224 crore contract from Uttar Pradesh Rajya Vidyut Utpadan Nigam (UPRVUNL).