The Telegraph
Since 1st March, 1999
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Relief rally sets market mood alight

Mumbai, Oct. 24: A gut-wrenching swing ended in a flourish that gave the market its first gain in five days and the hope that the sensex would conquer Point 5000 soon.

At 108.96 points, it was one of the sharpest spikes Dalal Street has seen over the past few months, a sentiment boost as markets glide into Samvat 2060 on Saturday, when Moorat trading will be held on key bourses.

What was riveting was the way the BSE sensex gyrated — a whopping 172 points between its intra-day crest and trough — before it wound down to its close of 4757.37.

“At least on the day of Diwali, you must have the bang,” said Arun Kejriwal of Kejriwal Research and Investment Services. Whether the bang resonates next week, when bourses will be swept up in welter of second-quarter corporate scorecards, is not easy to tell.

“Markets have a logic of their own,” some said. Jamshed Desai, who heads the research desk at Taib Securities, said the wobble on exchanges would persist. He has reasons not to believe otherwise. The flat trend in traded turnover and share volumes is one of them.

However, the majority of operators perceive a resurgence. They point to the pattern of trading today, when the sensex veered between 4599 and 4772, to argue that stocks will go from strength to strength now.

Grasim, Lever, Reliance, Infosys, Satyam Computers, SBI, HPCL, Zee Telefilms, BSES and Tata Motor were among those on the top of the turnover chart. Reliance Industries jumped Rs 14.25 to Rs 471.65, Lever Rs 4.40 to Rs 186.80 and Infosys Rs 148.35 to Rs 4558.20.

Technology carried the day, with NIIT and Infosys leading. The first place, though, went to Tisco, whose second-quarter numbers are expected to be ahead of expectations.

BSE’s volumes at Rs 2306.03 crore was up from Rs 2063.27 crore on Thursday, but not good enough to convince some that the rally would endure over next week. Among other gainers, Zee Telefilms vaulted Rs 6.15 to Rs 141.70 and State Bank Rs 6.75 to Rs 492.15, Tata Motors Rs 17 to Rs 377.50 and Tata Steel Rs 4.05 to Rs 341.50.

Rupee steady

The rupee was steady against the dollar today, closing at 45.33. Foreign capital flows from portfolio investors and traders was soaked up by banks’ purchase of greenbacks. Dealers said they expect the gains to continue on Monday, when month-end pressures from importers and companies intensify.

Despite the recent Reserve Bank steps to cap the interest on non-resident external deposits to 25 basis points over Libor, dollars continued to flow in and boost the sentiment in favour of the rupee, bankers said.

Premia on the forward dollar ended lower on renewed receiving interest after a sharply higher start, as exporters offloaded dollars, holding the view that the rupee could only strengthen in the near to medium term. The benchmark six-month forward dollar premium payable in March closed at 8-10 paise, down from Thursday’s closing levels of 11-13 paise after rising to an early high of 13-15 paise.

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