Sensex surges by 507 points this week

Mumbai, May 19: The BSE Sensex gained 507.25 points or 3.67 per cent to settle at 14303.41 this week on the back of firm global markets and reports of an early onset of monsoon.

Among the broader markets, the NSE S&P CNX Nifty Index rose 137.85 points or 3.3 per cent to 4214.50 in the week.

Analysts pointed out that small-cap and mid-cap shares which have been rising since early last month extended gains. BSE Small-Cap index gained 235.90 points or 3.3 per cent to 7220.30 while BSE Mid-Cap index rose 238.68 points or 4 per cent to 6089.95 in the week.

Trading for the week started on an upbeat note. The market surged on Monday on firm global markets, strong Q4 March 2007 results announced by the State Bank of India (SBI) and on prospects of political stability in Uttar Pradesh. But the Sensex came off the higher level after an initial 229.86-point rally that took it above 14,000 to 14026.02.

The Sensex settled on a weak note on Tuesday, tracking negative cues from global markets. It was highly volatile throughout the day's trading session. It lost 36.53 points.

A rally in interest-rate-sensitive banking, auto and real-estate shares, telecom stocks and index heavyweight Reliance Industries (RIL) boosted the market in a volatile trading session on Wednesday.

The BSE 30-share Sensex's surge materialised in the last one hour of trading. Higher Asian markets supported domestic bourses as Sensex added 198 points.

The market rallied for the second straight day on Thursday, as buying momentum continued in index pivotals, specially index heavyweight Reliance Industries (RIL) which struck a fresh all-time high. Firm global markets aided the surge as Sensex rose 172 points.

A late surge in Reliance Industries (RIL) helped Sensex end a tad higher on Friday, after it moved between positive and negative zone throughout the day. Subdued Asian markets and a powerful bomb blast at Mecca Masjid near Charminar in Hyderabad that took place in afternoon capped market's gains.

Foreign Institutional Investors (FIIs) bought shares worth a massive Rs 1060.80 crore on Thursday. The large inflow came after they had pulled out Rs 470 crore in two trading sessions from Tuesday to Wednesday, experts disclosed.

Reliance Industries was very much in demand this week. The stock hit a record high above Rs 1700 on Friday. The company had earlier said on Tuesday that it had made two gas discoveries in separate blocks off the east and west coasts of the country. The commerciality of the above discoveries is currently under evaluation.

But the Rupee's rise weighed on information technology (IT) shares. A rise in the Rupee directly impacts revenue and profit of IT firms, which derive a lion's share of revenue from exports to the US.

State Bank of India spurted on strong Q4 March 2007 results. The Lok Sabha, on Tuesday passed the State Bank of India (Subsidiary Bank Laws) Amendment Bill, 2006. The amendment bill will allow SBI to reduce its stake in subsidiary banks to 51 per cent, from the existing 55 per cent and above. Analysts explained that shares of SBI subsidiaries also spurted as the amendment will allow them to raise their authorized capital, split the face value of their shares and lift the ceiling on purchases of shares by individual investors.

RBI on Wednesday released the long-awaited draft guidelines for banks and dealers to begin trading credit default swaps in the country, derivatives that allow banks to hedge against the risk of default. The move will enable banks in India to step up lending to the corporate sector by allowing them to offload some of the risk to third-party investors.

The India Meteorological Department on Monday forecast that monsoon rains would arrive in Kerala on May 24.

Petroleum and Natural Gas Minister Murli Deora said on Tuesday that there was no immediate plans to raise domestic retail prices of petroleum products.

BSE said on Friday that it had completed the sale of 51 per cent of equity shares to 19 domestic and overseas investors, including 10 per cent sold to two foreign exchanges. The BSE's member-brokers tendered their shares in the exchange at Rs 5,200 per share. ''With the new ownership structure in place, BSE is well poised to pursue growth opportunities aggressively,'' said Rajnikant Patel, BSE's Managing Director and CEO.

China on Friday raised interest rates for a second time this year. The one-year benchmark lending rate will be raised to 6.57 per cent, the highest in more than eight years, from 6.39 per cent, starting tomorrow, the People's Bank of China said. The one-year deposit rate will be increased to 3.06 per cent from 2.79 per cent.

In another major development, China's central bank said on Friday that it would widen the daily trading band for the yuan against the dollar by 0.5 per cent effective from May 21, market pundits disclosed.

UNI