Indices resist weakness in World Markets

Market remained lackluster today with intra-day swings. Indices managed to close in positive territory after a late rally. In fact, India is the only market in the entire Asian region to close in the green today. Sensex closed at 6907, up 15 points and the Nifty at 2167, gain of 6 points. The Nifty futures discount to the spot index remains nearly unchanged at 10 points.

Yesterday, US markets lost ground on profit booking. The Dow and S&P 500 lost a per cent each on worries over inflation, while NASDAQ lost 12 points. Crude ended lower on profit booking by hedge funds and speculators. Most Indian ADR's ended week except for Dr. Reddy's and MTNL. While Infosys and Satyam lost more than 2 per cent each, ICICI Bank, Wipro, HDFC Bank and Tata Motors all lost more than a percent each.

Commerce ministry indicated that merchandise exports from the country for fiscal 2005 should touch $75 billion. This is creditable considering the weakness of the US dollar and would beat the targeted export growth rate of around 16 per cent for the year. The imports for the year are expected to be around $100 billion on higher crude prices.

Rahul Bajaj indicated the possibility of an early settlement to the ownership issues in the group. According to him, sugar major Bajaj Hindustan and unlisted Bajaj Consumercare would go to Shishir Bajaj while the other companies will stay within the parent group. He also announced Bajaj Auto's intention to pick up a 20 per cent stake in Maharashtra Scooters. The stock of Maharashtra Scooters shot up 20 per cent in morning trades. Bajaj Auto expects to sell around 1.8-million vehicles in the current year.

HSBC, one of the world's largest banking groups, announced fresh investment of $150 million in its Indian operations. The retail arm of HSBC India has been aggressive in housing and consumer loans and this move would make matters tough for the smaller Indian banks. HSBC also announced that it intends to remain only as a financial investor in UTI Bank. UTI Bank stock hit a new 52-week high on this announcement as well as its proposed GDR issue.

Private sector HDFC Bank saw a huge block deal worth over Rs700 crore — close to 4 per cent of the bank's equity — in morning trades. HDFC is picking up an equity stake in commodity exchange MCX. HDFC Bank has been on an upswing for the last one week on sustained interest from foreign investors. The stock of HDFC Bank closed marginally in the red while HDFC managed a positive closing.