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Good week for stock exchanges

A cheerful atmosphere prevailed on the Bombay Stock Exchange last week for many reasons: strong economic fundamentals of the country, appreciation of the rupee against dollar, and renewed buying support and technical short covering by the foreign institutional investors and domestic institutions during the week ending September 26.

Union Finance Secretary Montek Singh Ahluwalia said at an International Monetary Fund meeting during the midweek that India would continue to simplify procedures and speed up decision making. His statement that India is committed to economic reforms to woo foreign investment helped boost the sentiments of the FIIs.

Echoing him, Reserve Bank of India Governor C Rangarajan said that the country's economic fundamentals were strong and that the government was committed to deepening the economic reforms. "We are exploring the possibilities of liberalising the capital account," he said.

The strengthening of the rupee against dollar in the foreign exchange market (the rupee closed at Rs 36.19) saw local institutions purchase a considerable number of heavy-weighted shares as well as side-corner shares.

Mirroring the uptrend, the BSE Sensitive Index (30 scrips) recovered smartly by 127.12 points to close at 3925.24 points as against its previous week's close of 3825.12 points.

The broadbased BSE National Index (100 scrips) improved to 1703.63 points over last week's close of 1664.05 points, showing a net gain of 39.58 points. The BSE-200 and dollex indices increased by 06.57 and 03.80 points to 380.01 and 174.67 points as compared to previous week's close of 373.44 and 170.81 points respectively.

However, total turnover declined to Rs 40.35 billion as against last week's total turnover of Rs 42.98 billion, a loss of Rs 2.63 billion.

Monday opened on a weak note. The investors' confidence was shaken following the government's revenue raising measures including the petroleum price hike, import tariffs, rupee instability against the dollar, political uncertainty at the Centre, and the financial turmoil in the Southeast Asian market. All these also slowed the flow of foreign funds into the Indian market.

The FIIs investment in the capital market during the first quarter of the month touched Rs 2.7 billion, which was modestly higher than the corresponding period of last month.

At the National Stock Exchange, equity prices improved marginally on buying support from FIIs and bull operators.

The NSE-50 increased by 11.80 points to 1116.10 points as against its previous weeks close of 1104.30 points. The Midcap Index finished at 1252.05 points over last week's close of 1244.50 points, showing a net gain of 7.55 points.

The total turnover on the exchange rose by Rs 26.67 billion to Rs 74.87 billion compared to last week's total turnover of Rs 48.2 billion.

On Friday, the NSE faced problems in the trading system on account of a breakdown in the VSAT network and about 600 terminals were affected. This caused difficulty to the members in placing orders at around 1435 hours IST.