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Sensex down by 63 points
Mumbai—On Monday unwinding by operators continued
and gathered momentum on the uncertainty created by nearing of the deadline of July 2.
Also foreign institutional investors (FIIs) who were providing direction to the market
chose to stay away on the first day of new settlement leading to operators being
directionless.
The winding up pressure from the operators was heavy as they had begun winding up open
positions on the first day itself with the last settlement in their hand to square up
positions at The Stock Exchange (BSE) and the National Stock Exchange (NSE).
The Sensex opened weak at 3378.17, incidentally the day’s best level, against last
Friday’s close of 3381.76 and later moved downwards to a low of 3306.83 before
closing at the two-month low at 3318.67, a net fall of 63.09 points or 1.87 per cent.
New economy stocks were mostly sold evident from the fact that the sectoral index of BSE
IT lost almost 10 per cent or 144 points to close at 1486.54.
Reports that the Unit Trust of India (UTI) was seeking Rs 1,500 crore loan from SBI to
meet mounting redemption pressures and pay dividend on US-64 also sparked off selling
pressure.
Several ICE stocks closed above the eight per cent lower circuit filter (Trygin
Technologies, HCL Technologies, Silverline Technologies, Television 18, Hinduja TMT,
Pentamedia, Saregama, DSQ Software, Polaris, Mastek) with some hitting the extended 16 per
cent lower price band (Global Telesystems, PSI Data Systems and HFCL).
Dealers said, fag end buying in some of the heavy weights from the old economy sectors
like Dr Reddy’s, ACC, L&T, Bhel and ICICI changed the trend and helped the Sensex
to recover partially.
The announcement by Indian Rayon to acquire group bull stake in PSI Data System had a
negative impact on the stock price of the latter, though Indian Rayon gained 2 per cent to
close at Rs 81.50. While PSI Data system stock was locked in the lower circuit of 16 per
cent in tandem with other piers at Rs 134.35.
IT training major NIIT was also locked in the 16 per cent lower circuit at Rs 296.55 to
reach anew 52 week low. While Satyam hit a new 52-week low at Rs 153.80, but was down by
10.87 per cent at Rs 155.75 at the close of the session.
Index heavy weights like ITC (down by 3.42 per cent at Rs 765.15), HLL (down 2.05 per cent
at Rs 200) and RPL (down 2.09 per cent at Rs 46.75) also witnessed heavy unwinding
pressure.
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US -64
may not be NAV-linked by next year
Mumbai—It is unlikely that the Unit Trust of India will to link its flagship
US-64 to its net asset value (NAV) by February 2002.
UTI has taken this decision to ward off the panic that has gripped the market leading
companies to redeem their US-64 holdings.
UTI is also expected to announce a dividend payout of around 9 per cent for US-64, down
from 13.75 per cent last year.
This is in line with the rate of return offered by the public provident fund (9.5 per
cent) and the RBI relief bond (8.5 per cent). The curtailment in dividend is likely to
reflect its eroding net asset value. Although UTI brass refused to comment on the NAV
issue, market sources said there have been informal discussions with the finance ministry
on this issue. A formal decision will be taken at the trust board meeting on July 2.
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BSE
changes stand, to kick off OIS in all 31 stocks
Mumbai—In a revision of its earlier stand the Bombay Stock Exchange (BSE) has
decided to begin stock specific options in all the 31 stocks prescribed by the Securities
and Exchange Board of India (Sebi) last week. Earlier, the BSE was contemplating to begin
options in stock (OIS) in only 10 stocks and these were to be selected on the basis of the
four stringent criteria set out by Prof JR Varma group on derivatives.
The much awaited Sebi list for OIS on Thursday last includes ACC, Bajaj Auto, BPCL, Bhel,
BSES, Cipla, Digital Equipment, Dr Reddy’s Lab, Grasim Industries, GACL, HLL, HPCL,
Hindalco Industries, HDFC Ltd, ICICI Ltd, Infosys, ITC, L&T, M&M, MTNL, Ranbaxy
Lab, RPL, RIL, Satyam Computer, SBI, Sterlite Optical, Telco, Tata Power, Tisco, Tata Tea
and VSNL.
The National Stock Exchange (NSE) had already given an indication earlier that on the
basis of Prof Varma’s criteria, around 30 to 35 stocks qualify for OIS trading and
the exchange (NSE) is contemplating to start OIS in all of them.
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UTI Bank paid-up capital to
increase by 33 percent
Hyderabad--UTI Bank may get its additional equity through the foreign direct
investment (FDI) route. P J Nayak, chairman & managing director (CMD) of the bank,
said the bank's equity was likely to go up by another one-third of the existing paid-up
capital of Rs 131 crore.
This is to ensure that the UTI's holding in the banking arm will come down to 40 per cent
from 60 per cent as per the mandatory requirement stipulated by the Reserve Bank of India
(RBI), Nayak said and added that the bank also needed capital to meet the capital adequacy
requirements for its business expansion plans.
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