Mumbai: Market opens on firm note

Mumbai, May 4: The Sensex today opened with a gain of 51.68 points on the Bombay Stock Exchange (BSE) at 14,129.89 from it's previous close of 14,078.21 points, tracking robust global markets.

The broader Nifty Index also gained 17.85 points on the National Stock Exchange (NSE) at 4,168.70 from it's previous close of 4,150.85 points.

At the premier BSE, the market-breadth was positive as against 872 stocks that rose, 800 had declined. A total of 66 scrips were unchanged, clocking a turnover of Rs 639 crore, market analysts observed.

Cement shares edged higher after the government provided concession on excise duty at the time of discussion on the Finance Bill 2007-08 in Parliament yesterday.

ACC rose 2 per cent to Rs 869.55, and Grasim rose 1.7 per cent to Rs 2,536. The government will now charge an ad valorem excise duty of 12 per cent on cement priced above Rs 190 per 50 kg bag as against the budget proposal of Rs 600 per tonne. After this 12 per cent duty, the effective reduction in tax burden on cement sold above Rs 190 per bag would be up to Rs 7, Finance Minister P Chidambaram said during the debate on the Finance Bill 2007-08 in the Lok Sabha yesterday.

IT shares drifted lower even as the government provided marginal relief with respect to a levy of the fringe benefit tax on employee stock option plans (Esops). Satyam Computer lost 1.4 per cent to Rs 471, Infosys shed 1 per cent to Rs 2,060, Wipro lost 1 per cent to Rs 565 and TCS shed 1 per cent to Rs 1,277. The Finance Minister 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 yesterday passed the Union Budget 2007-08 by a voice vote.

Banking scrips rose ahead of the weekly inflation data. State Bank of India gained 2.5 per cent to Rs 1,151 and HDFC Bank rose 1 per cent to Rs 1,016. The wholesale price inflation rate is forecast at 5.87 per cent for the 12 months to 21 April 2007, lower than an annual 6.09 per cent a week before. The data will be released around noon.

IFCI dropped 2 per cent to Rs 45.65, on profit-taking, even as it reported strong Q4 March 2007 results after trading hours yesterday. Colgate-Palmolive jumped 8.7 per cent to Rs 382.70, after it announced a scheme of reduction of its equity capital. Asian shares forged ahead today, with Australia setting another record high, while the dollar clung to gains, nervously waiting on US payroll data due later for clues on Federal Reserve policy. Market sentiment was lifted by the bellwether Dow Jones industrial's push to yet another record close, helped by a surprisingly strong US service sector survey and a drop in labour costs. Japanese and Chinese financial markets remained shut for their respective Golden Week holidays.

US stocks edged yesterday after a series of indicators showed signs of strength in the economy and a moderate rise in wage inflation. The Dow industrials closed at a record for the third straight day, led by a 3.7 per cent gain in Verizon Communications Inc on news that it was taking video and Internet customers from rival Cablevision Systems. The Dow rose 29.50 points, or 0.22 per cent, at 13,241.38. The Standard&Poor's 500 Index was up 6.47 points, or 0.43 per cent, at 1,502.39. The Nasdaq Composite Index was up 7.62 points, or 0.30 per cent, at 2,565.46.

The key data later in the day today is US job data for April.

Median forecasts are for a payroll increase of 1,00,000 in April, with the jobless rate ticking up to 4.5 per cent from 4.4 per cent in March, analysts noted.

UNI