Retail investors flocking to mutual funds
Retail investors are finally flocking towards mutual funds schemes and the number of retail investors participating in mutual funds has doubled in the last six weeks.
Asset management companies say this is because of renewed retail interest in the stock market, change in investment mindset of retail customers and shift in asset management companies (AMC) internal focus from assets under management growth (AUM) to investor base growth.

Analysts in Prudential ICICI said that while the organisation recorded 1500 transactions a day in 2003, this grew to over 3500, so far this year. Birla Sun Life AMC currently has about 6 lakh investors and the company had an annual average of 2000 communications a day, this has now shot up to 3300 plus, over the last few weeks."
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Fund managers say interest rates could harden
Investors in company and bank fixed deposits could be in for a pleasant surprise as recent changes in bond investments by mutual funds indicate the chance of a rise in interest rates.

Franklin Templeton and Birla Sun Life funds have switched to bonds with a shorter life because they are safer when money managers are unsure about interest rate trend.

Some feel that rates are set to rise. Some fund managers have switched to shorter bonds because they expect an immediate increase in interest rates while others say interest rates could increase in the long-term, but not in the immediate future. They felt that the rise in interest rates could come from either strong economic growth or an increase in inflation. Another is the pull exerted by an increase in rates in developed economies.
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IFCI hit by adverse merger ratio reports
IFCI was hit by reports of adverse merger ratio and opened 20 per cent lower at Rs 12.70 after closing at Rs 15.85 the previous day.

Sources said there were pending sell orders of 4.8 lakh shares at this counter as investors rushed to offload their holdings. Towards the end of market hours, PNB tried to that they have not yet worked out the merger ratio.

PNB ended at Rs 271.20 and analysts said that the reported swap ratio of 30:1 is adverse for the IFCI shareholders.
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Sensex swings up in late-hours on buying pressure
The BSE Sensex, which went into negative regions in afternoon trading, rose at the close to end 17.3 points up at 5946.78 points. The index fell to a low of 5905.2 points in afternoon trading but buying support in the last hour of trading in stocks such as Hindalco, Tata Steel, SBI, Grasim, L&T, Hindustan Lever and ACC reversed the downtrend.

The S&P CNX Nifty gained about 0.6 per cent to 1891.5 points. SBI and Nalco were the major index movers.
However the overall market sentiment was bearish even though there was buying support in frontline stocks. About 1,087 mid cap stocks declined while 848 stocks gained.

Aluminium stocks were up and Hindalco gained Rs 54.4 to Rs 1385.4 after slipping into the negative territory in early trading.
Cement stocks were also in the limelight on news that prices may be raised. Grasim zoomed by 4.27 per cent to Rs 1154.75; ACC appreciated 3.9 per cent to Rs 275.20; L&T was up by 2.47 per cent to Rs 517.80; and Gujarat Ambuja gained 2.40 per cent to Rs 309.55. Mangalam Cements rose 5.05 per cent to Rs 15.39 on news that Lafarge and a Bangkok-based broker showed interest in buying its plant.

Hindustan Construction Co rose 2.32 per cent to Rs 112.3 after news that had bagged an order from the National Highways Authority of India. Jubilant Organsys touched a new high of Rs 1,015.90 during the day.

Banking stocks ended the day in the negative territory. The BSE Bankex ended the day lower by 1.68 per cent at 3058.89 points. Index heavyweight ICICI Bank, with a 32.87-per cent weightage in the index was down by 7.98 per cent to Rs 318.15. The stock had touched its new 52-week high only the previous day. Earlier, the bank had announced the equity expansion to the tune of Rs 3,500 crore, following which concerns of dilution of earnings have taken a toll on the stock on Wednesday.

Stocks like J&K Bank (Rs 504) and Vijaya Bank (Rs 61.75) touched new 52-week highs.

Zee Telefilms rose by about two per cent to Rs 151.15 on news that the company is planning to raise long-term funds through ECBs.

Tata Coffee, EIH Associated Hotels, Phillips Carbon, Gujarat NRE Coke, Satnam Overseas, Oriental Hotels, Cosmo Films, Bannari Amman Sugars and Ispat Industries noted increase in volumes
.
Satyam Computer, Reliance, Bharat Forge, Ashok Leyland, Titan, Container Corporation, IDBI, UTI Bank and Essel Propack were the losers in the day's trading.
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Tata Steel gains
Tata Steel was in the limelight and there was aggressive buying in the stock by domestic as well as foreign institutional investors.

There were rumours that the counter witnessed buying in anticipation of further rise in hot-rolled steel prices in March. The scrip touched an intra-day high of Rs 432 before closing at Rs 430.15.

More than 81 lakh shares changed hands at this counter at BSE. Tata Steel has now gained 12.3 per cent from Rs 382.50 on February 3 to current levels of Rs 430.
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Escorts MF to recast proposal
Following Sebi's decision to allow a 50 per cent exposure to derivatives by equity funds, Escorts Mutual Fund is planning to revise its proposal for its special derivatives-based product that the company mooted last year.
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