Late rally lifts Indices

Rex Mathew
18 March 2005

Markets opened flat and soon slipped into the red disappointing many who were expecting a technical bounce back after five days of losses. The bad news on inflation kept the market at lower levels till afternoon. When the market men were readying themselves for another negative closing, the frontline stocks held a smart rally to take the indices up. Sensex closed at 6700, up 30 points and the Nifty at 2109, up 10 points. Nifty futures closed at a premium to the spot index.

Oil shot up again and posted a new all-time high of $57.6 in early trades before closing marginally lower at $56.4 to a barrel. US markets were flat as some positive news on employment data was counterbalanced by rising crude prices. Indian ADR's continue to seek lower levels with most of them posting losses except ICICI Bank, Wipro and Satyam. Tata Motors and HDFC Bank each lost 2 per cent.

Inflation for the week ended 5 March ended higher at 5.3 per cent as compared to 4.95 for the pervious week. The increase is mainly on account of increase in manufactured prices. The figure was higher than market expectations and contributed to the weak sentiment till afternoon.

ICICI Bank was one of the stars of the day touching a new all time high today. The bank's sponsored ADR issue was subscribed more than four times and was priced at $21.11 per ADR. The price is equivalent to Rs459 per share, or a 10 per cent premium to the domestic market price. The stock closed with gains of 3 per cent.

Bharti Televentures ended its losing streak and rallied more than 5 per cent during the day. Couple of negative news flows like RBI banning fresh FII purchases and a stake sale by the promoter had dampened the stock price. The stock bounced back on value picking at lower levels. A foreign brokerage had given a fresh buy recommendation on the stock.

IT services major, TCS, indicated that it is on the lookout for acquisitions. The company is also hopeful of additional business from major US corporations including auto major, Chrysler. The stock closed with gains of close to a per cent.