Sensex spurts up by 196 points, closes at 14,056

Mumbai, Jan 13: The Bombay Stock Exchange (BSE) Sensex closed at14,056.53, up by 196.01 points over last Friday's closing. The Niftyclosed at 4052.45, up by 69.05 points over the week.

There was some dramatic action in the market this week. While themarket saw significant fall on three consecutive days starting fromMonday, it bounced back with a vengeance on Thursday by posting robustgains of 268 points.

There were some fears when the Sensex lost about 500 points fromlast Friday's close till Wednesday's close. In the light of thesedevelopments, the gain of 268 points on Thursday came as a breather.

Friday's gains were all the more euphoric. The Sensex and theNifty both touched their all time highs on the day gaining 425.82points and 110.20 points respectively at closing.

On January 8, the Sensex corrected 208.37 points to settle at13652.15. There was correction across all Asian indices on the day andthe bourses were not spared either. The fall in the BSE mid cap indexwas comparatively less severe at 0.4 per cent as against Sensex's 1.5per cent.

The BSE Small-Cap index rose by 0.8 per cent. This can be seensymbolic of the action moving from large cap stocks to small caps andmid caps, something that was anticipated for a while. IT, telecom andauto shares came down sharply on Monday.

The correction phase extended to Tuesday as well with the Sensexlosing a further 85.82 points to close at 13652.15. The IT sector againplayed a role in the fall. With the rupee appreciating, there wereconcerns about companies in the sector being able to maintain theirprofitability levels.

Many felt that it was purely a technical correction and expectedthe markets to pull back on Wednesday after two days of sluggishness.But they were proved wrong, as there was a further decline of 204.17points or 1.5 per cent in Sensex on Wednesday.

There have been reports about hedge funds selling Asian equitiesto offset the losses incurred by them on account of a sharp 9 per centfall in oil price since the beginning of 2007. On the day, Nifty'sstrong resistance at 3900 was broken and the closing was well belowthat level at 3850.30, down 1.5 per cent over the previous day's close.

The correction sentiment reversed finally on Thursday when theSensex gained 268 points. The gains were based on short covering ofpositions and marketmen opined that one could not infer the bull runhaving resumed on the basis of Thursday's gains. But on Friday, theSensex sky rocketed to close above the psychological mark of 14000while Nifty too crossed its psychological 4000 mark.

And this time, the gains were not defensive. They came on a build up of fresh new long positions, brokers said.

On Friday, the BSE Small Cap index closed at 7278.33, posting a gain of180.15 points over last Friday's closing. The BSE Mid Cap index closedFriday at 5974.64 gaining 38 points over the week. Among individualstocks, Infosys was in the news for its quarterly results. The resultswere as per market expectation but over the week, the stock has been aloser by Rs 52.45. The stock closed Friday at Rs 2222.35.

Index heavy weight Reliance Industries gained 4 per cent over theweek to close at 1340.10. Its Q3 results are to be announced on January18.

Reliance Communications was down Rs 13.40 over the week. It closedFriday at Rs 433.75. On Wednesday, the company's board approved aforeign currency convertible bonds (FCCBs) of upto USD 1 billion in oneor more tranches.

ICICI Bank's dollar-denominated, three-tranche debt offeringreportedly received strong response. The transaction, expected to raiseat least USD 300 million, has attracted orders worth over USD 2billion. The stock rose by Rs 59.70 over the week to close at Rs970.10.

HDFC Bank came out with its third quarter results on Thursday. Ithas reported 31.7 per cent growth in net profit for Q3 December 2006 atRs 295.64 crore. The net profit was within market expectations.

Net interest income has risen a 38.4 per cent to Rs 928.63 crore(Rs 670.61 crore), beating market expectations. The stock closed flatat 1.63.25, just 0.87 per cent above its previous week's close.

Despite falling crude prices, ONGC stood at Rs 924.85 on Friday,up Rs 28.90 over its previous week closing. Other oil PSUs HPCL andBPCL also did well. HPCL closed at Rs 304.15 up Rs 6.80 while BPCL wasup by Rs 16.95 at Rs 368.70. The last trading day of the week wasparticularly good for the oil companies.

IFCI soared this week on the back of it selling a part of itsstake in NSE for USD 160 million. The company plans to utilize themoney for lending to AAA rated companies. The stock shot up to Rs21.82, gaining 67 per cent over last Friday's close of Rs 13.06.

TV Today gained 15 per cent over its previous week's close tosettle at 96.85. The gains came following a bulk deal amounting to astake of 1.3 per cent in the company.

Zee Telefilms demerged its news business to Zee News Limited (ZNL)and the cable business of the company and that of Siti Cable Network,to Wire&Wireless (India) Limited (WWIL). Zee News closed the weekat Rs 29.95 while Wire&Wireless settled at Rs 122.10.

In the IPO segment, Cairn India got listed on January 9. It listedat Rs 140, which is 12.5 per cent below its issue price of 160. Thestock traded at a discount through out the day to finally close the dayat Rs 137.50. The issue had not got a good response on subscription andthe down beat sentiment was reflected in its listing as well.

On the other hand, Shri Ashtavinayak Cine Vision, which got listeda day after the Cairn India IPO did quite well. Its IPO price was Rs160. The stock did well despite the bearish market sentiment on theday. It closed the day 66.50 points above its IPO price at 226.50.

The company is in the business of movie distribution and is said to have a good track record.

As per data available till Thursday, mutual funds were net sellersin equities to the tune of Rs 887.20 crores. FIIs until Wednesday, werenet sellers to the tune of Rs 4549.80 crores, brokers added.

UNI
>