IPO refunds boost market, Sensex up 418 pts

The easing of liquidity, post-refund of excess money to investors from the public offers of Reliance Power and Future Capital Holdings, saw the key benchmark stock prices rise for the second straight day. Both the IPOs together had received bids over $200 billion.

The index pivots, which had corrected by over 10 per cent after last month's crash, yet again picked up momentum lifting the indices to a record two-week high on closing.

The Bombay Stock Exchange's (BSE) Sensex rose by 2.29 per cent or 417.74 points to close at 18,660. The broader S&P CNX Nifty of the National Stock Exchange (NSE) was up 2.75 per cent or 146 points at 5,463.

Amitabh Chakraborty, head of equity at Reliagare Securities said, "The frontline stock prices are set to rise higher from here as liquidity has returned to the system. Also, it is likely that we may yet again see fairly good flow of money from foreign funds shortly, if there is no further bad news relating to the sub-prime issue on the global front." 
 

LIQUIDITY WARMTH FOR THE INDICES
	Feb-04	% Chg*
Reliance Comm	685.00	11.90
DLF	883.00	8.54
Wipro	464.25	6.16
TCS	976.00	5.03
NTPC	214.45	4.36
*Change over previous day's close

The domestic stock prices got a boost even from the rally in Asian stock markets, fuelled by mega takeover talks. China's benchmark Shanghai Composite, which had declined over 14 per cent this year, on Monday rose by 8.13 per cent.

The Aluminum Corporation of China's purchase of a stake in Rio Tinto Group fuelled speculation of more takeovers. Also, Fortescue Metals Group jumped after the South China Morning Post reported China may buy a stake.

China's Alibaba.com too climbed after Microsoft Corp. offered to purchase Yahoo Inc, an Alibaba shareholder.

Among the other Asian indices Hang Seng rose by 3.77 per cent and Nikkei gained 2.69 per cent.

On the domestic front, the market breadth indicated a buoyant sentiment among investors as 79.96 per cent stocks or 2,274 stocks advanced against the declines of 18.74 per cent or 533 stocks.

The shares of Reliance Communication (Rcom), which rose by 11.96 per cent at Rs 685, was the top gainer in the index pack. The stock rose as Rcom promoter Anil Ambani filed draft prospectus to raise over Rs 6,000 crore through initial public offer of its subsidiary engaged in telecoms tower business.

DLF was another top gainer, which gained 8.54 per cent at Rs 883. The IT stocks gained substantially for the second consecutive day. Wipro, TCS, Infosys and Satyam Computers were up in the range of 3-6 per cent.

Both the small and mid-cap index on BSE advanced 2.87 and 3.14 per cent respectively.