The Hindu Business Line : Sensex gains on transaction tax changes

THE Finance Minister's tweaking of the transaction tax proposals appears to have been received positively by the markets. The BSE Sensex rose by 35 points to close at 4,993.76 points, just seven points shy of the 5,000-mark.

The S&P CNX Nifty ended the day at 1,581.40, up 15 points from its previous close of 1,566.10 points. The transaction tax proposal had weighed heavily on the markets since the Budget day. Trading had been cautious as investors awaited a review on the proposal.

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The Sensex opened on a mild note at 4,973.88 points. Trading remained range bound for most of the trading session, till the announcement was made. The decision to cut the levy on non-delivery based transactions to 0.015 per cent from 0.15 per cent and the cut in tax on derivatives by one basis point, gave day-traders and arbitrageurs, the major drivers of volumes in the markets, a reason to cheer. So much so, that right after the announcement, the Sensex soared well past the 5000 - mark to 5041 points. However, selling pressure in the very last minutes of the trading session drove the benchmark index down.

For every seven stocks that gained among the stocks constituting the Sensex, three stocks fell. The major gainers include the stocks of Tata Power, Tata Steel and HDFC, while the stock of Grasim figured in the loser's list.

Engineering and capital goods stocks up: The stocks of Bharat Earth Movers, Crompton Greaves, Engineers India, Lakshmi Machine Works and Kirloskar Brothers, were some of the stocks that ended the day higher. The ABB stock, however, bucked the trend. The company saw a drop in net profits for the quarter ended June. However, excluding the extraordinary income realised in the previous year, there has been a growth in net profits.

IT stocks stable: Stocks of the IT sector were under pressure on Tuesday as a churning of investments in frontline IT companies was expected, in order to subscribe to the TCS IPO. However, some of these stocks managed to recoup a part of their losses.

While the Infosys stock continues to trade weak, frontline stocks such as Wipro and Satyam recovered. Other gainers in the sector include the stocks of Polaris Software, Hexaware Technologies and Mascon Global. The stock of Geometric Software Solutions added another Rs 1.05 to close at Rs 519, following its announcement of its results for the quarter.

Company announcements: The following stocks gained or declined, following news related to their respective companies:

The stock of HDFC emerged as the major gainer of the day. The company has decided to acquire the balance 50 per cent shareholding in the customer call centre, Intelenet Global Services, from TCS for a consideration amount of Rs 1,610 million.

The stock of Britannia Industries attracted considerable buying interest on Wednesday. The company is in the process of setting up a Greenfield Project in Uttaranchal to augment its biscuits capacity at an estimated project cost of Rs 552 million. It also posted a leap in profits to Rs 600 million for the quarter ended June compared to Rs 286 million the previous year.

The stock of Birla Global Finance gained marginally. The company is planning a preferential issue of 10 lakh equity shares of Rs 10 each at a price of Rs 40 per share to the promoter group company.

The stock of Tamil Nadu Newsprint & Papers fell by Rs 2.7 to close at Rs 53.55. The company witnessed a substantial fall in profits to Rs 14.90 million for the quarter ended June 30, 2004 compared to Rs 146 million for the corresponding previous quarter.

The stock of Indo Rama Synthetics slipped by Rs 3.5 to close at Rs 61 even as the company posted a rise in net profit for the quarter.