Indices at all-time highs

Rex Mathew
04 March 2005

Market indices continued to scale new highs backed by healthy inflows from FII's. The Sensex crossed the 6800 barrier for the first time ever, and did it comfortably. FII's have so far pumped in more than Rs10,000 crore in 2005 and have become more aggressive post budget. The Sensex closed at 6850, up 65 points and the Nifty at 2148, a gain of 19 points. Nifty futures closed at a marginal discount to the spot index.

Crude ended higher at $53.5 after touching an intra day high of $55 to a barrel. US markets were mixed, with the Dow managing a positive close while the NASDAQ ended with losses. Indian ADR's had a good day with MTNL going up by more than four per cent. The tech pack, Infosys, Satyam and Wipro posted good gains while Tata Motors went up by two per cent. HDFC Bank, ICICI Bank and VSNL posted marginal gains while Dr. Reddy's was the sole loser.

Inflation, for the week ended 19 February, dropped to 4.83 per cent from 5.01 per cent the week before. The drop in inflation came as a pleasant surprise for the market, which was expecting around five per cent. Lower inflation levels may be short lived though, with steel prices going up and the prices of petroleum products expected to be revised upwards next month.

Newswire Dow Jones has reported that the government may go ahead with its divestment plans in Maruti, BHEL and Balco in the next financial year. It has also reported that Oil India and Power Grid Corporation may come out with IPO's in the last quarter of next fiscal year. Left parties are opposed to further stake sale by the government in BHEL and Balco.

Telecom Tribunal TDSAT has ruled against Reliance Infocomm in the international call re-routing case. The tribunal dismissed all arguments put forward by Reliance and imposed a penalty for violation of license terms. Reliance is expected to move the Supreme Court against this order. The order had little effect on the Reliance stock price, which closed with gains of more than two per cent.

Bajaj Auto has announced that Rahul Bajaj would step down on April 1 as managing director. His son Rajiv Bajaj is set to take over as MD while Rahul Bajaj would remain as chairman.

The Punjab National Bank has set the price band for its second public issue between Rs350 and 390. The stock soared as ten per cent of the issue is reserved for existing shareholders. It should be noted that the stock is trading at a huge premium to the proposed issue price. Indian Overseas Bank also went up on plans for a GDR issue.