The Hindu Business Line : Markets this week

Sensex opened on a positive note on Monday and climbed nearly 140 points from the previous close of 15190, helped by short-covering and touched the intraday high of 15550. However, owing to selling pressure at higher levels, the Sensex pared its gains to close the day at 15400, up nearly 200 points.

Reliance Communications stock suffered owing to uncertainty over the proposed MTN deal. The stock declined 1.51 per cent to close at Rs 535. In the past one week it has shed 3.43 per cent. Lack of clarity over the structure of the deal has imparted a short-term weakness in the stock, say analysts.

The withdrawal of the export tax levied on domestic steel pipe and tube makers by the Government brought much cheer to companies like Welspun Gujarat Stahl Rohren and Jindal Saw. These stocks made decent gains on the bourses.

It was, however, not business as usual for the brokerage houses, as the markets have continuously been falling in the past couple of months, affecting volumes and in turn business at these broking firms. The grim outlook made the broking stocks lose shine.

Investors were back in the market on Tuesday encouraged by reports of healthy advance tax collections from corporates. A fairly widespread monsoon also drove equity markets northward. The Sensex gained 1.96 per cent, while the Nifty was up 1.74 per cent.

Investors were seen accumulating bank stocks expecting a good show in the coming quarters. ICICI Bank, HDFC Bank and SBI were top gainers of the day.

Even as share buyback proposals by corporates are on the rise, both at domestic and global levels, market valuations ruled lower than last year. Sasken Communications, Patni Computers, Great Offshore and Reliance Infrastructure were some of the companies that opted for buyback in the recent past. The latest to join the bandwagon is Eicher Motors.

Ranbaxy Laboratories Ltd and Pfizer Inc have agreed to settle their patent litigations worldwide involving Lipitor, the cholesterol-lowering drug. The news on Wednesday attracted investors to this counter; the stock was up by nearly Rs. 16 or 2.5 per cent.

The week ended on a jarring note, with inflation zooming to the unexpectedly high level of 11.05 per cent, sending shivers down the spines of market players. While, the heavyweight Reliance Industries fell to Rs. 2096, the most in two weeks, ICICI Bank Ltd declined to its lowest, in a long time, to Rs. 734 . The two stocks account for a seizeable portion of the Sensex weight.

The Nifty Index on the National Stock Exchange dropped bhy 2.2. per cent to 4406.35 points.

Disturbed by the continuing political wrangle over the civil N-deal with the US, Sensex finished the week with a hefty loss of nearly 620 points at 14,570.

Compiled by B. L. Sudarsan
Podcast by S. Vasudevan and M. J. Madhavan

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