The much awaited petro price hike was finally announced last week and the stock markets across the country greeted the news. For one, the issue was never whether the government would raise the prices of the petroleum products, but whether the government had the guts to take a unanimous decision on such a crucial matter.
Finally, when the Union government decided to hike the price, the market sentiment improved despite the fact that it would result in all round price rise.
By the end of the week, market sentiment firmed up further mainly in anticipation of the re-introduction of carryforward system. The Securities and Exchange Board of India (Sebi) was to take a decision on the issue in its board meting which took place in Chennai. On the last day of the settlement at the Bombay Stock Exchange (BSE), the 30-share BSE Index breached the 4000-mark and closed at 4032.35 points.
The market remained extremely volatile during the previous week with conflicting reports on the health of the rupee flooding from different quarters.
On the other hand, the NSE Index closed the week at 1149.25 points on Friday against Mondays close of 1104.70 points.
S Sriram, a strategist with Lloyds Securities was of the view that given the limited options, the government had little room to manoeuvre.
The decision was imperative, but the government could have given a far better return on the bonds which they have issued, he added.
He feels that in the medium run, all the oil companies will benefit from the oil sector deregulation. The oil companies should definitely benefit from the overall deregulation. However, how much of the enhanced margins will go to oil companies will depend on the exact nature of the tax structure which the government will decide and also on the extent of deregulation, said Sriram.
The Indian markets moved in tandem with the other Southeast Asian markets, where the currency continued to fall drastically. The foreign institutional investors (FIIs) decided to offload huge quantity of shares in the previous week. At the BSE, the FIIs remained net sellers on three trading days. On Monday, the FIIs sold nearly Rs 3 crore worth of securities, Rs 11 crore worth on Tuesday and Rs 18 crore on Wednesday. However, the trend came to an end on Thursday when the FIIs turned net buyers with investment over Rs 15 crore.
Despite the heavy offloading by FIIs, the market remained more or less firm and in fact the Sensex made a smart recovery on each of the trading sessions.
NEW DELHI: A flurry of buying activity by UTI amid short covering by bear operators brought back buoyancy to the stock market last week. Stock prices staged a remarkable recovery to close with fresh widespread gains.
Foreign funds, which remained major sellers in the recent bearish conditions, returned to the ring and started picking blue-chip companies at attractive low levels.
The persistent fall of the rupee against the dollar dampened the sentiment of the foreign institutional investors. A few brokers were of the opinion that the rise was a technical correction as most of the stocks had bottomed out.
Reports that BSE president MG Damani predicted that the Sensex may touch 4500 points level by Diwali also triggered speculative buying towards the end of the week.
On the fundamentals front, ACC reported dismal performance for the first quarter of the current fiscal year as the companys production has dropped considerably.
Foreign funds were major buyers in automobiles, multinational companies and some well managed company stocks. The DSE Index after opening sharply higher at 833.45 points rallied further to close the week at 850.67 points as compared with the previous close of 814.92 points, thus showing a whopping rise of 35.75 points or nearly 4 per cent.
