FIIs net outflows at Rs 3,436 crore in May
Mumbai: Foreign Institutional Investors (FIIs) sold huge number of equities, from the second trading week of May onwards, resulting in net sales of Rs 3,436 crore ($780.9 million) of equities till May 28. On the other hand Mutual funds (MFs), bought equities worth Rs 1,139.3 crore in the period under review, according to data with Securities and Exchange Board of India. In the debt market, FIIs were net sellers at Rs 254 crore ($57.8 mn) while MFs registered net purchases of Rs 763.11 crore during the period under review.

The total (equities+debt) for FIIs for 2004 was pegged at net inflows of Rs 16,016.7 crore ($3,499.4 mn). FIIs sold the largest number of equities at Rs 604.4 crore ($137.60 mn) on May 14 followed by Rs 595.2 crore ($135.5 mn) and Rs 504.4 crore ($114.8 mn) on May 11 and 17 respectively.
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NIIT to raise Rs 100 cr from market
Mumbai: After spinning off its software solutions business into a separate company called NIIT Technologies (NTL), in December last year, NIIT will raise Rs 100 crore through equity or debt for investing in its software and training business. With this 75 percent of the equity share capital of NTL will be held by shareholders of NIIT and the balance by the demerged NIIT through a wholly owned subsidiary.

NTL has 2,300 professionals and may be listed on the Bombay bourses by August this year. NIIT will hold 25 percent in NTL and all NIIT shareholders will get shares in NTL as part of the company's plans to demerge its businesses. NIIT will use the investment over three years to grow both the businesses said senior company officials. Mr Thadani will be CEO of the demerged company, while Arvind Thakur, who currently heads the software services business, will be CEO of NTL.
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Weak futures indicate bearish market
Mumbai: After the common minimum programme declared by the new Congress-led coalition turned out to be a non-starter with the market, the mood of the investors in the derivatives market was worse than their counterparts in the cash market.

Due to this, discounts in the futures and options segment of the market increased further on Friday, and the leading benchmark indices — Sensex and Nifty — lost around 4.5 per cent each. Since the derivatives market is taken as a pointer towards the future cash market trend, derivatives dealers are now expecting some more slide from the current level since June contracts for a number of index heavyweights are at substantial discount to their respective share prices.
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CMP takes toll on rupee, bonds follow suit
Mumbai: The Common Minimum Programme released by the Congress Left Coalition took its toll on the rupee and the financial markets began on a weak note last week with a fall in bond prices and the spot rupee losing by 10-15 paise per day. Later in the week higher inflation and crashing equity prices further depreciated the spot rupee and gilt yields firmed up with the 10-year benchmark paper touching 5.25 per cent.

The spot rupee lost 20 paise on Friday and touched a low of 45.60 after opening at 45.38-45.40 to a dollar on aggressive dollar buying by banks facing month-end oil payments. The RBI is understood to have intervened in the spot as well as cash dollar markets and helped the rupee to close at 45.48-45.50 to a dollar, said dealers. The move also helped the cash dollar to close at a discount to the dollar, thus reversing the trend of cash dollar premium till now.

Dealers said part of the demand was from banks to buy dollars for month-end oil payments. The inflation rate, which figured higher at 4.67 per cent as against 4.20 per cent last week, acted as an additional dampener to the market.
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US stocks end firm
New York: US stocks rallied strongly on hopes of strong economic growth. According to Bloomberg, benchmarks recorded their biggest weekly rise since the period ending April 2. The S&P's 500 Index gained 2.5 per cent, and snapped its longest weekly losing streak since February 2003. The Dow Jones Industrial Average added 2.2 per cent and the tech-focussed Nasdaq Composite Index climbed 3.9 per cent. Most Indian ADRs however, particularly IT stocks, finished last week on positive note.

The confidence on US economy and the fall in rupee value against the US dollar seemed to have boded well for the tech counters. Infosys closed the week higher at $82.75 against the previous week close of $80.97, Wipro at $44.4 ($42.37) and Satyam at $19.54 ($18.48). Pharma major Dr. Reddy's Laboratories, however, finished in negative territory at $18.52 ($18.92). The company's group profit for the fourth quarter ended March 31, 2004, fell 72 per cent on one-time charges, competition and research costs. The group's profit including that of its subsidiaries dropped to Rs 16.20 crore in the three months ended March 31 from Rs 62.30 crore a year earlier.

ICICI Bank ADR also closed marginally higher at $12.87 ($12.73) after the bank said that it has overtaken HDFC, home loan market, for the fiscal 2003-04 by registering disbursements of Rs 13,278 crore. The divergent trend in the US and Indian markets helped a few Indian counters to widen their premiums. Satyam's premium improved to 45.65 per cent (38.05 per cent), Wipro to 34.2 per cent (27.11 per cent) and HDFC Bank to 16.10 per cent (8.86 per cent).
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