Sensex firm amid political worries

On Monday,the Reserve Bank of India RBI reduced Cash Reserve Ratio by 0.25 per cent to release Rs 17,000 crore of primary liquidity into the banking system while kept the key short-term lending rates unchanged in view of risks from inflation.

Brokers said rate-sensitive shares like realty,banking and auto sector attracted buying as the RBI indicated it may cut rates later if inflationary pressures subside. Capital goods,power,metal and refinery also saw demand.

The Sensex also got support since last weekend after the US Fed announced a third round of stimulus measures.

Power,capital goods and metal stocks also led Sensex8217;s rise after the government said withholding tax on overseas borrowings will be slashed to 5 per cent from 20 per cent.

The approval to Rajiv Gandhi Equity Savings Scheme RGESS to encourage first-time retail investors to invest in stocks,too lifted the sentiment.

Sensex had resumed higher at 18,619.90 and moved in a wide range of 18,866.87 and 18,291.93 before ending the week at 14-month high of 18,752.83,showing a smart rise of 288.56 points,or 1.56 per cent. The Sensex had ended at 18,871.29 on 25th July 2011.

The Sensex has gained 1,323.27 points or 7.59 per cent in last three weeks.

The NSE 50-share Nifty also rose by 113.50 points or 2.03 per cent to finish at 14-1/2-month high at 5,691.15. It had closed at 5,728.95 on July 7,2011. It also gained by 432.65 points of 8.22 per cent in last three weeks.

Volatility ruled the markets this week on account of both local and global events amid short-coverings ahead of the expiry of Futures and Options Famp;O contracts on September 27. The BSE Mid-Cap and BSE Small-Cap indices outperformed the BSE Sensex by rising 3 per cent and 2.81 per cent,respectively,indicating more retail investors participation.

On the global front,Asian and European stocks also ended higher on hopes economic stimulus by central banks.

8220;Markets rose on back of further policy announcements made by the government on last Friday. The RBI responded to these initiatives by reducing CRR by 0.25 per cent,8221; a broker said.

Persistent capital inflows from foreign funds into equity market also boosted the market sentiment. FIIs were the the net buyers of Rs 5,731.32 crores in the last week including the provisional figure of September 21.

According to analysts,the government8217;s next policy move after easier foreign investment rules announced last week will dictate the near term trend on the bourses.

Shares of power generation,power distribution and power transmission firms will be in focus on buzz that the government will announce next week,measures aimed at improving the finances of power utilities.

Pharma stock will also be in focus on buzz that the government is set to ease foreign direct investment norms for the pharmaceutical sector.

Meanwhile,the Consumer Price Index CPI,retail inflation,rose to double digits at 10.03 per cent in August from 9.86 per cent in July on soaring vegetable prices.

Out of the 30-share Sensex pack 20 scrips finished with gains while 10 others ended with losses.

Major gianers from the Sensex pack were Jindal Steel 14.60 pct,BHEL 13.53 pct,SBI 12.28 pct,Bharti Airtel 9.40 pct,Larsen 6.54 pct,Icici Bank 5.85 pct,Sterlite Ind 5.62 pct,Tata Power 4.95 pct,Maruti Suzuki 4.09 pct,ONGC 4.02 pct,Mah and Mah 4.00 pct,Hero Motoco 3.35 pct,Bajaj Auto 3.24 pct and Gail India 3.16 pct.

However,TCS dropped by 7.69 pct followed by Dr Reddy8217;s 5.86 pct,Wipro 3.21 pct,Coal India 2.73 pct,HUL 3.26 pct,Cipla 2.09 pct,Infosys 1.44 pct and Sun Pharma 1.26 pct.

Among the sectoral indices,the BSE-Realty rose by 8.84 pct followed by Bankex 6.96 pct,BSE-CG 6.88 pct,BSE-Power 5.82 pct,BSE-PSU 4.22 pct,BSE-Auto 3.26 pct and BSE-Metal 2.97 pct while the BSE-IT fell by 3.56 pct,BSE-HC by 2.18 pct,BSE-FMCG by 2.05 pct and BSE-Teck by 1.28 pct.

The total turnover at BSE and NSE rose to Rs 10,802.64 crs and Rs 63,606,56 crs respectively as against the last weekend8217;s level of Rs 10,663.21 crs and Rs 49,445.49 crs.

Both the stock exchanges were closed on September 19 on account of 8220;Ganesh Chathrthi8221;.

Oil and oilseeds: Edible and non-edible oils turned sluggish in an truncated trade at the oils and oilseeds market during the week under review.

Groundnut oil prices weakened further on heavy selling pressure following poor stockists as well as exporters demand amid adequate supplies.

Refined palmolein also dropped due to lack of retail buying on the back bearish Malaysian cues.

Castorseeds bold and castoroil commercial witnessed volatile trade before succumbing to stockists offloading following subdued demand from shippers and soap industries.

Castorseeds futures declined on hectic speculative selling amid reduced export enquiries.

Linseedoil prices went down owing to lower demand from paint and allied industries.

The market was closed on Wednesday for8217;Ganesh Chathurti8217;.

In the edible oils segment,groundnut oil resumed steady at Rs 1,160 and drifted further to close at Rs 1,110 from preceding weekend8217;s level of Rs 1,160. Showing a fall of Rs 50 per 10 kg.

Refined palmolein resumed lower at Rs 594 and fell further to end at Rs 568 from last weekend8217;s level of Rs 598,registering a fall of Rs 30 per 10 kg.

In the non-edible section,castorseeds bold resumed higher at Rs 3,800 and moved in a range of Rs 3,850 and Rs 3,715 before concluding at Rs 3,615 from last weekend8217;s level of Rs 3,750,a loss of Rs 135 per 100 kg.

Castoroil commercial also opened up at Rs 790 and hovered between Rs 800 and Rs 773 before settling at Rs 753 from its previous weekend8217;s level of Rs 780,a fall of Rs 27 per 10 kg.

Linseed oil resumed lower at Rs 820 and maintained the level to close at Rs 820 from preceding weekend level of Rs 825,a marginal loss Rs 5 per 10 kg.

Moving to the futures section,castorseeds for September delivery resumed slightly higher at Rs 4,000 and went up to touch Rs 4,170 before drifting to end at Rs 3,880 from last Saturday8217;s closing level of Rs 3,992 showing a net fall of Rs 119 per tonne.

Forex: Continuing its northbound journey for the third straight week,the rupee ended up by another 85 paise at over four-month high of 53.45 against the Greenback during the shortened week under the review on sustained rally in local equities amid dollar selling by exporters and some banks.

The Forex market was closed on September 19,2012 for observing 8220;Ganesh Chaturthi8221;.

Robust capital inflows amid weak dollar overseas also boosted the rupee sentiment,a forex dealer said.

On Monday,the Reserve Bank of India RBI in its mid-quarter monetary policy review cut the cash reserve ratio CRR by 0.25 per cent,releasing nearly Rs 17,000 crore into the system while kept the key lending repo and borrowing reverse repo rates unchanged to contain the high inflation.

At the Interbank Foreign Exchange Forex market,the domestic unit resumed sharply higher at 53.80 a dollar from last weekend8217;s close of 54.30 and moved in a range between a high of 53.33 and a low of 54.42 before concluding the week at 53.45,showing a rise of 85 paise or 1.56 pct. In straight three week,the rupee has gained 207 paise or 3.72 per cent.

The Indian benchmark sensex also extended its gains for the third straight week and closed up by nearly 289 points or 1.56 per cent on host of positive factors.

Exporters and some banks also sold dollars on hopes that the dollar value will come down in overseas markets on reports that Spain and European officials were working together on a plan for economic reforms.

The buying in favour of rupee also received a boost after Finance Minister P Chidambaram cut withholding tax on overseas borrowings to 5 per cent from 20 per cent,a move expected to bridge current-account shortfall that previously fuelled the slide in rupee.