Sensex registers modest gains amidst choppy trade

Mumbai, Jun 16: The Bombay Stock Exchange (BSE) 30-scrip Sensex rose by 98.90 points or 0.7 per cent to settle at 14,162.71 in the week ended yesterday from its previous week's close of 14,063.81, while the broader National Stock Exchange (NSE) 50-stock S&P CNX Nifty rose by 26.45 points or 0.63 per cent to settle at 4,171.45 from the previous week's close of 4,145.

The BSE Small-Cap index rose 7.66 points or 0.1 per cent to settle at 7,350.25 in the week ended yesterday from its last week's close of 7,342.59, while the BSE Mid-Cap index rose 24.70 points or 0.4 per cent to settle at 6,180.92 yesterday from its last week's close of 6,156.22.

''The market edged higher last week amid volatile trade on alternate bouts of buying and selling. Concerns of rising domestic and global interest rates weighed on the sentiment. Caution was also partly due to large initial public offering (IPO) pipeline. While the IPO of reality major DFL was over last week, another large issue from ICICI Bank is set to open for subscription early next week,'' market analysts observed.

The barometer index, BSE Sensex rose 20 points on Monday, snapping four days losing streak. Prior to Monday's rise, Sensex had plunged 507 points in just four trading sessions, to 14,063.81 on June 8 this year from 14,570.75 on June 1.

The market ended with modest gains on Tuesday, amid high degree of volatility. Sensex rose 48 points on the back of gains in oil&gas, metal and cement shares. The barometer index regained 14,000 level after it had dipped below the psychologically important level in intra-day trade.

The market edged lower on Wednesday, tracking weak global markets as investors grappled with a seemingly relentless rise in US bond yields. The 30-share BSE Sensex lost 128 points at 14,003.03. Firm global markets aided a rebound on Thursday, as the Sensex jumped 201 points. Stocks rose across the globe as US bond yields eased and US economic data came in stronger than expected.

Sensex lost 41 points in volatile trade yesterday. The fall in domestic bourses was in contrast to the firmness in global equities.

The US treasury market continued to show signs of stabilising, helping Asian and European equities extend their gains. Rising US bond yields had weighed on global markets earlier this week.

Information technology (IT) stocks attracted buying at declines amid speculations that the rally which took the rupee to nine-year high against the dollar last month, has lost momentum. IT stocks had retreated over the past few weeks hit by rupee's surge. A rise in rupee impacts IT firms as they derive a lion's share of revenue from exports to US.

The IPO of reality major DFL was subscribed over 3 times, with substantial bidding from foreign institutional investors.

Cement shares recovered after data from Cement Manufacturers' Association showed that cement sales rose 10.6 per cent to 14.21 million tonnes last month. ACC was the top draw among cement scrips after its shipments rose 19 per cent last month.

Reliance Industries (RIL) witnessed alternate bouts of buying and selling. As per some reports, RIL will firm up a gas-pricing formula for its Krishna Godavari (KG) basin by next month. It also plans to produce crude oil from the KG block in 2008. The production will initially start at 30,000-40,000 barrels per day and peak at about 50,000 bpd.

Copper and aluminium maker Hindalco Industries extended gains on continued market speculation that Alcan may team up with Sterlite Industries to bid for Hindalco. The rumour has lifted the scrip sharply since the beginning of this month. On Monday, the BSE announced shift of a total of 35 scrips to trade-to-trade segment to be effective from yesterday. The stocks transferred to trade-to-trade segment include Andrew Yule&Company, Dawn Mills, Kernex Microsystems (India), Parekh Platinum, TVS Electronics and Alphageo (India) among others.

On Tuesday, Finance Minister P Chidambaram said the government did not want to reduce overall demand but favoured moderating the expansion in some sectors.

The intention is not to constrain demand in every sector. The intention is to curb demand in sectors in which overheating exists, like real estate and housing.

The wholesale price index-based inflation rose 4.8 per cent in the 12 months to the week ended June 2 this year, lower than the previous week's increase of 4.85 per cent, due to a decline in food and energy prices, data released by the government yesterday revealed.

The annual inflation rate was the lowest since end-July last year when it stood at 4.72 per cent. The annual inflation rate was 4.88 per cent during the corresponding week of the previous year.

According to the latest data of Index of Industrial Production (IIP), industrial output was up 13.6 per cent in April this year compared with 9.9 per cent in April last year. Manufacturing output climbed up 15.1 per cent in April this year against 11 per cent in April last year.

Industrial output of March has been revised and stands at 14.5 per cent.

The strong industrial production data triggered concerns that further monetary tightening by the Reserve Bank of India (RBI) may be on cards, belying expectation that the interest-rate cycle had peaked.

Union Commerce and Industry Minister Kamal Nath said on Wednesday that the government is confident of meeting its 2007-08 export target of USD 160 billion despite the rise in the rupee this year.

The rupee has risen more than 8 per cent against the US dollar this calendar year. It may be noted here that so far, it is Asia's best performing currency.

UNI