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July 21-25: Equity prices saw uptrend

Despite the uncertain political situation in the country, equity prices witnessed an uptrend following continuous buying support from foreign institutional investors at fundamentally strong counters on the country's premier Bombay Stock Exchange during the week of July 21-25.

During the week, the J R Varma Committee, which was appointed by the the Securities and Exchange Board of India to review the carry forwards system submitted its report with modified form including recommendation of abolition of twin-track systems and elimination of 90-day limit for carried forward transactions, settlement only by delivery after 75th day, and also abolition of Rs 100 million limit on financier funding.

The SEBI permission to BSE to expand its terminals at 99 centre across the country did not not have much of an impact on the capital markets. The SEBI has set up a panel to educate investors because the registration had drastically reduced to five per cent from 17 per cent. The panel will involve experts from Doordarshan, All India Radio and advertising agencies.

Mirroring the cheerful trend, the BSE sensitive index closed at 4189.81 points as against its previous week's close of 4124.81 points, showing a gain of 65.00 points. The broadbased BSE national index closed at 1823.10 points over the last week's close of 1791.93 points increasing 32.17 points.

The BSE-200 and dollex indices finished at 407.25 and 189.92 points as compared to previous week's close of 399.00 and 186.02 points showing a gain of 08.25 and 03.90 points respectively.

The total turnover on screen-based trading system was increased by 2.7474 billion to Rs 4329.70 crore from Rs 40.5496 billion.

The National Securities Depository Limited has decided to reduce the custody charges to the depository participants from 7 basic points to 3.5 basic points per annum.

The market opened on a cautious note as the brokers were awaiting the judgement on the bail application of Bihar chief minister Laloo Prasad Yadav. Finally, at fag end of the week, Yadav resigned and elected his wife as successor. This spread relief among the foreign investors.

The National Stock Exchange has withdrawn its demand for indemnity bonds from its members as also the guarantee for cases where shares sent for transfer are returned by companies because of objections. Thus, the settlement guarantee would be restricted only up to the payout day.

BSE President M G Damani said that the business volume of BSE will go up to Rs 20 billion from the present average level of Rs 10 billion per day, as soon as expansion of terminals across the country becomes operational. The business volume on BSE will come through quality business from the 3000 scrips.

Meanwhile, pivotal prices at the National Stock Exchange gained marginally on sizeable buying support from financial institutions and bull operators during the week.

The NSE-50 index closed at 1185.05 points as against its last week's close of 1181.40 points, gaining 03.65 points. The midcap index settled down at 1291.85 points over the previous week's close of 1284.40 points increasing by 07.45 points. The total turnover declined to Rs 83.2156 billion as compared to last week's total turnover of Rs 86.1418 billion, suffering a loss of Rs 2.9262 billion.

UNI