It was advantage bulls again on Dalal Street on Friday. Strong gains in the blue chips lifted the market close to its new 5-month high on Friday as investors ignored the introduction of the Securities Transaction Tax (STT) and bet on better economic growth prospects and strong quarterly results. A small dip in domestic inflation also boosted the bulls.Shrugging off the new transaction tax, the 30-share BSE Sensitive index (Sensex) ended with a gain of 91.93 points, or 1.65 per cent, at 5,675.54, its best close since May 5, 2004. However, the volume declined due to the new tax.From Wednesday’s low of 5,428.20, the Sensex has gained 247.34 points on fresh buying. The benchmark index gained 147.79 points for the week.The NSE S & P CNX Nifty index gained 29.65 points, or 1.70 per cent to end at 1,775.15, recovering from the day’s low of 1,737.85.‘‘The higher GDP growth of 7.4 per cent for the last quarter announced on Thursday was a positive news on the economy front. On Friday the domestic wholesale price inflation fell marginally to 7.80 per cent for the week ended September 18, compared with 7.87 per cent a week earlier. This is another good news news,’’ said BSE dealer Pawan Dharnidharka.Moreover, the market mood appeared extremely bullish on hopes of strong quarterly results. ‘‘The monsoon has been better than earlier anticipated and expectations have started building up over the July-September 2004 quarter. The indication of this is partially visible in the advance tax payments by leading companies,’’ said a fund manager who preferred anonymity.The market ignored the introduction of STT, which replaced the long-term capital gains tax from Friday. Short-term capital gains tax will be applicable at a uniform 10 per cent as compared to the earlier 10-30 per cent. ‘‘Some day traders and speculators cut down their exposure due to fears over the new tax,’’ said a market source.Turnover tax on delivery based trades will be levied at 0.15 per cent, to be shared equally between buyer and seller. On non-delivery based trades, turnover tax will be applied at 0.015 per cent (including sales and purchases). STT will be applicable at 0.01 per cent in the futures & options segment. The NSE took the brunt in the fall in volumes as many speculators reduced their exposure.The volumes on the bourses were modest, with shares worth Rs 2,003.01 crore having traded on the BSE on Friday, compared to Rs 2,173.83 crore on Thursday. The number of shares traded dropped to 18.64 crore from 21.76 crore (on Thursday).The fall in volume was more pronounced on the NSE where 24.45 crore (33.84 crore) shares worth Rs 4,084.05 crore (Rs 5,145.11 crore) were traded. In the derivatives segment of the NSE, 302,271 (455,274) contracts worth Rs 9,542.42 crore (Rs 13,713.45 crore) were traded.Oil and gas stocks firmed up. The BSE Oil and Gas index gained 76.74 points, or 2.70 per cent, to end at 2,923.43. ONGC (up 3.91 per cent to Rs 777.80) firmed up on fresh buying interest on hopes of improved quarterly results. SBI was up 2.30 per cent to Rs 478.95, Hindustan Lever (up 0.92 per cent to Rs 126.60) and ICICI Bank (up 1.19 per cent to Rs 289.45) also contributed to the gains of the Sensex.
