The Telegraph
Since 1st March, 1999
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Raptures in the trading ring

Mumbai, July 10: The government’s resolve to press ahead with legal changes in the way bourses function sent ripples of excitement among investors today.

Coming close on the heels of a rejuvenating Maruti IPO, the Cabinet decision to amend the Securities Contract Regulations Act provided the ballast to a rally that was triggered by Infosys’ gloom-busting numbers.

“It’s a good step forward,” Deena Mehta, former president of the Bombay Stock Exchange (BSE), said. Pointing out that much more needs to be done for stock exchanges to emerge as corporatised entities, she said amendments in the Income Tax Act and a one-time waiver of stamp duties would a long way in that direction.

Reports that the long-awaited demutualisation would finally be pushed through with a law to be framed soon sent BSE sensex surging 58.84 points to 3679.63 points.

Infosys was at the heart of the euphoria as operators said the company had given the technology bandwagon the momentum it had long needed to speed ahead.

For Maruti, which was the toast of the market on Wednesday, a reality check loomed. Investor interest flagged, as evident from volumes on the two premier exchanges. On Dalal Street, one crore shares were traded, down from the 1.61 crore that changed hands on Wednesday.

“The stock will be lower tomorrow. The appetite will wane in the coming days and as the stock price moves in the narrow range, many small investors will unload their shares and book profit,” analysts predicted.

The steady flow of good news into the market and the pro-active steps taken by the government will put the markets on an even keel, they added.

Rupee at a fresh 33-month peak

The rupee ended at a new 33-month peak of Rs 46.2050/2150 per dollar today, backed by sustained foreign fund inflows and export remittances in moderately active trade at the interbank foreign exchange market. Notching up a further three paise gain from Wednesday's close of Rs 46.2350/2425, the rupee opened on a steady note at Rs 46.23/24 per dollar, but tested early intraday lows of Rs 46.2450/2550 on some dollar short-covering by banks.

However, strong dollar supplies from foreign institutional investors (FIIs) and export proceeds helped the currency rebound smartly and post fresh record gains towards the close, dealers said.

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