Chidambaram, FIIs help sensex rise 88 pts
Mumbai: The BSE Sensex continued its rise on Wednesday led by PSUs and banks. The 30-share benchmark index jumped 1.8 per cent following renewed buying by foreign funds in the last few trading sessions. Dealers said Finance minister P Chidambaram's visit to Mumbai also helped boost market sentiments. The Sensex rose 88.57 points during trading hours to close at 4,923.69 points, after opening at 4,846.09 points.

The index recorded a high of 4,946.15 points and a low of 4,846.09 points on Wednesday. On the National Stock Exchange (NSE), S&P CNX Nifty closed at 1,535.20 points, up 27.30 points from its previous close. FIIs purchased equity worth Rs 264.9 crore on Tuesday and worth Rs475.30 crore in the last three trading sessions after being net sellers of equity worth Rs3,255 crore in May. Among banking stocks, ICICI Bank rallied 10.61 per cent to Rs261.60 and Indian Overseas Bank was up 8.15 per cent to Rs44.45.
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FIIs return to the market
New Delhi: Foreign institutional investors who were seen selling equities in the latter half of May are now seen coming back to the market. Money from the US that had flown to India and other emerging markets late last year and the reverse flow which battered Asian stocks in April-May, has completed its journey back home. Data puts the current US portfolio cash levels, drawn down in Q4 '03, equal to the end-Q3, '03 level. US investors had spent heavily buying stocks and other investments in Asian markets during October '03-February '04. Since March, however, US funds have largely been on a return flight home.
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Tata Power dips on MERC refund order
Mumbai: Tata Power Company's (TPC) stock price plunged 6.6 per cent on Wednesday on the news that the company has to shell out nearly Rs550 crore following an order by the Maharashtra Electricity Regulatory Commission (MERC). The stock fell Rs17.45 to close at Rs247.45 and was the biggest loser among 'A' group stocks. The combined volume on The Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) stood at 53.8 lakh shares as compared to the combined volume of 23 lakh on Tuesday.

Apart from paying Rs322 crore to REL, Tata Power has to pay delayed payment charges of Rs 35.20 crore and an interest of Rs190.19 crore to Maharashtra State Electricity Board (MSEB). The company will also have to reduce the average tariff by 9.5 per cent as directed by MERC. Reliance Energy gained on the bourses witnessing a 8.76 per cent jump to Rs 537.70, following news that the company will receive a refund of Rs 322 crore from Tata Power.
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PSUs firm up
Mumbai: Encouraged by the finance minster's meeting with market regulators SEBI, RBI and other market participants in Mumbai on Wednesday PSU banking stocks, surged ahead on investment based buying. ONGC, BPCL, IOC, HPCL and most of the other stand-alone refineries closed higher. ONGC traded firm on the back of a further rise in global crude oil prices which touched an all time high of $42.45 a barrel. PSU oil refining/marketing stocks such as Indian Oil, Chennai Petroluem, MRPL, Bongaigaon, BPCL, HPCL etc gained ground on reports that these companies would be allowed to hike product prices marginally. The BSE-PSU index, gained by 3.29 per cent today.
Brokers said that RBI's decision to allow further FII buying in ICICI Bank, which appreciated by almost 10 per cent today, also resulted in the feel good factor percolating to PSU banking stocks.
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GAIL may list on NYSE or NASDAQ
New Delhi: There is an increasing possibility of State-run gas firm GAIL (India) Ltd listing on the New York Stock Exchange or the NASDAQ by converting its Global Depository Receipts into American Depository Receipts. "During the course of Government's recent offer for sale of 10 per cent equity in GAIL, international investors raised concern over low liquidity and tradability of GDRs and suggested that GAIL should consider converting GDRs into ADRs," a company source said.

Presently, GDRs constitute about 6.5 per cent of the company's capital. The proposal is likely to be put for approval by the board soon. As the process would need approval from Foreign Investment Promotion Board, Reserve Bank of India and ministries of finance and petroleum and natural gas, the whole process may take a couple of years. The choice between NYSE and NASDAQ would be made after studying the merits and demerits of listing on these exchanges.
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Rising yields leads MFs, foreign banks to sell bonds
Mumbai: Mutual funds (MFs) and foreign banks seem to have sold heavily in the bond market to cut down their losses following a hike in yields by 3-4 paise on a daily basis. Dealers said mutual funds sold Rs300-400 crore bonds as gilt schemes are incurring losses with rising yields. Over the last fortnight, the yield on the 10-year benchmark government paper rose risen from 5.16 / 17 per cent to a high of 5.30 per cent, with prices coming down further.

Dealers say that dollar yields are poised to go on the back of rapid recovery in the economy, whereas the Eurozone is expecting a hike in interest rates with rise in inflation following increased consumer spending.

Great Britain has already reviewed its base rates twice. With increased economic activity in Japan, yields are on a high with further upwards bias. In India, the new government has signalled several welfare activities, which, in turn, triggered off the fear of higher government borrowing programme. All these hint that interest rates in India are also bound to go up. This has forced most gilt scheme managers and trading banks to reshuffle portfolio and realign it with new rate structure.
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