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FII buying, punters' short-covering keep the market steady; Skindia GDR Index up 10.15 points to 764.13

The Indian global depository receipts or GDRs and the BSE Sensex appreciated further during the week ended on June 17, following the hectic buying by foreign institutional investors, and consequent short covering by punters.

The Skindia GDR Index and the BSE Sensex actively picked up after rumours that Clinton was sending his envoy to India to defuse the Kargil situation hit the market. The sentiment turned positive.

As a result, the Skindia GDR Index and the BSE Sensex went up by 10.15 points to 764.13 and 68.78 points to 4109.89. Indices oscillated in a wide band of 6.03 per cent and 5.73 per cent respectively.

During the week, the average spreads of the 39 most actively traded DRs has slightly moved up to 9.35 per cent on June 17 from 9.25 per cent on June 10.

The average premia of the 63 DRs zoomed up to 7.23 on June 17 from 3.91 per cent on June 10. This rise in premia was also due to the depreciation in the value of Indian rupee against the greenback.

During the week, in the GDR section, the major gainers were Grasim, Mahindra & Mahindra and Ashok Leyland which appreciated by $ 6.55 (5.45), $ 7.35 (6.55) and $ 5.05 (4.53) respectively.

The major losers were Videocon International, BSES Limited and Century Textiles which declined by $ 1.45 (1.58), $ 10.05 (10.90) and $ 1.30 (1.38) respectively. There were 21 gainers, 14 losers and 28 unchanged as compared to last week of 39 gainers, 17 losers and 7 unchanged.

Skindia Finance said in a statement that during the week, the 63 DRs gained by 1.46 per cent whereas the shares declined by 1.33 per cent. Auto sector was the top gainer in the DRs gaining by 8.26 per cent, the rise in the stock prices has been on the back of rise in the sales of vehicles.

Sale of medium and heavy commercial vehicles recorded an increase of 65.30 per cent year on year to 4,950 units in the month of April. The month of May as well has been good for Telco, with a sale of 3,974 units of medium and heavy commercial vehicles, a rise of 60 per cent year on year, the increase in its light commercial vehicle sales for May was 4.87 per cent to 3,121 vehicles.

During the first quarter of financial year 1999-2000, the auto sector GDRs advanced by 30.89 per cent and the shares 19.37 per cent. Bajaj Auto is the only loser with its GDR falling by 1.87 per cent to $ 17.05 and its share 12.84 per cent to Rs 549.10 for the same period.

The rise in the sale of commercial vehicles is seen as one of the indicators of the economic revival. Riding on the sentiment the GDRs of Ashok Leyland, L&T, M&M and Telco touched 52-week high at $ 5.10, $ 16.50, $ 7.47 and $ 5.18 respectively on June 17.

With normal monsoon expected for the eleventh year, the sales of tractors are expected to pick up, the main beneficiary of this is going to be M&M. L&T being the largest producer of cement in India is also going to benefit due to the rise in demand for the cement.

Other top gainers in the GDRs were aluminium and cement sectors that gained by 2.95 per cent and 2.73 per cent respectively. The top loser was the power sector losing 3.79 per cent followed by textiles and telecom losing by 0.12 per cent and 0.09 per cent respectively.

Cables remained unchanged this week. On the other hand, in the underlying shares, the top gainer was the steel sector appreciating by 7.82 per cent followed by aluminium and auto with 4.62 per cent and 3.92 per cent respectively. The top losers were IT, power and fertiliser sectors that dropped by 6.52 per cent, 5.57 per cent and 4.83 per cent respectively.

UNI

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