Markets still volatile, Sensex gains 29 pts

It was another volatile session for Dalal Street on Friday. The 30-share BSE Sensex oscillated on both sides of break, even as investors wai...

It was another volatile session for Dalal Street on Friday. The 30-share BSE Sensex oscillated on both sides of break, even as investors waited for the new government to announce its economic policies and decide on the Cabinet formation.

After moving in an intra-day range of 174 points, the benchmark BSE Sensex ended with a modest gain of 29.46 points at 4,961.57.

The benchmark index, which shed 74 points on Thursday, shed 108.30 points, or 2.10 pc for the week.

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The NSE S&P CNX Nifty Index gained 16.35 points to end at 1,560.20.

The market opened weak and declined sharply in early trades amid fears of a fresh rift among the coalition partners of the new Congress-led government over the issue of cabinet formation.

Investors are now awaiting the common minimum programme (CMP)— a statement on policies acceptable to all members of a coalition that includes Communist and regional parties— of the government to get a clue as to the kind of policies the new government will pursue. The market is also awaiting the announcement of key portfolios like finance.

Despite smart recovery from the lower levels, the undertone of the market remained cautious as investors preferred to wait and watch. Worries over increase in the government’s fiscal deficit loom large on the bourses. Already the consolidated fiscal deficit (including that of states) has been a huge 10 pc of the gross domestic product (GDP) for several years.

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Analysts fear that the new government may have to raise the fiscal deficit target for the current year from 4.4 pc due to likely decline in disinvestment revenue. Congress has said its disinvestment policy would be less aggressive. Analysts feel the government may not able to cut subsidies immediately after the election.

Housing finance major HDFC rose from a low of Rs 553 to Rs 584.95 before settling at Rs 584.90, up 4.80 pc over its previous close. Cement major Grasim (up 4.23 pc to Rs 1,070.80) ended higher – rising from an intra-day low of Rs 962 – on renewed buying at lower levels after early weakness. PSU pivotals Oil and Natural Gas Corporation (ONGC), up 3.51 pc to Rs 706.55, HPCL (up 2.95 pc to Rs 332.60) and MTNL (up 0.36 pc to Rs 126.35) also ended higher on value buying at lower levels after early weakness.

Tata Steel (up 2.54 pc to Rs 328.70) gained ground, rising from the day’s low of Rs 317.05, on fresh buying at lower levels after the company announced on Thursday that it would consider the issue of bonus shares. Wipro bounced back from a low of Rs 1,427 to Rs 1,521 before settling at Rs 1,509.45, up 2.35 pc over its previous close. Heavyweights ITC (up 1.12 pc to Rs 899), Hindustan Lever Ltd (HLL), up 0.77 pc to Rs 138 and State Bank of India (SBI), up 0.13 pc to Rs 515.50 ended higher, contributing to the market recovery after early weakness.