20 - June - 2005

The Sensex created a record by breaching the 7,000 mark today.The BSE Sensex closed at 6,985 (up 78 points) and the NSE Nifty closed at 2,144 (up 20 points) and the June futures closed the day at 2117.. The rupee was trading at 43.55 to the dollar.

The Sensex opened on a positive note and moved up to touch a high of around 6995 during the opening trades. After that the index displayed a range bound trend and was trading between 6960 and 6980 level. It was party time for the bulls on Dalal Street today as the SENSEX breached the coveted 7000 mark level today led primarily by the strength in Ambani Group stocks, which have a high weightage in the Sensex (RIL and REL have a combined weightage of more than 10%) .

However, this was almost immediately met with selling pressure as the markets slipped a little. However, buying support at lower levels helped the markets to recover to higher ground at the close of trading today.
The performance of mid-cap stocks today was nothing to write home about. As the benchmark indices continued to rise, the CNX Mid-cap 200 index fell for the third consecutive session today, now down about 4% from its all-time highs made last week.

The Reliance family feud finally terminated with the Ambani brothers coming to a final settlement by agreeing to split the conglomerate. Mr. Mukesh Ambani will have the responsibility for Reliance Industries (RIL) (FY05 turnover Rs 732 bn) and IPCL (FY05 turnover Rs 94 bn) while Mr. Anil Ambani will head Reliance Infocomm (FY05 turnover Rs 54 bn), Reliance Energy (FY05 turnover Rs 46 bn) and Reliance Capital (FY05 turnover Rs 3 bn). The settlement seems to have further boosted shareholder confidence in the company as the respective businesses are now set to have focused on governance. Each of the Reliance group stocks was up handsomely today on the bourses. In fact, these were the main contributors to the indices' strength today. The gainers were Reliance Capital (26%), Reliance Energy (11%), Reliance Infrastructure (5%), Reliance (5%) and IPCL (4%).

Matrix Laboratories has acquired a majority stake in a Belgian-based pharmaceutical firm, Docpharma NV. The acquisition will cost Matrix an estimated US$ 263 m, making it the largest acquisition to date by an Indian pharma company. This acquisition will give Matrix access to the high-growth potential pharmaceutical markets of Belgium and Southern Europe. This is the second significant transaction announced in recent times by Matrix Labs. The company had recently announced a merger with Strides Arcolab for which due diligence is currently being carried out. Post-merger with Strides Arcolab, the merged entity will become one of the top ten pharma companiesin India with revenues in excess of Rs 10 bn. The stock, however, closed marginally weak today.

The markets look toppish to most players but the market rarely, if ever, goes with the majority. Will the market take another leap to close above 7000or...will it correct ???

Top Gainers

REL. ENERGY 660.25 11.47%
RELIANCE 630.75 5.08%
HINDALCO 1,184.45 4.30%
IPCL 167.75 4.10%
INFOSYS 2,380.00 4.02%

Top Losers

GUJ.AMBUJA 59.35 -86.86%
SHIP. CORP. 137.40 -4.68%
PNB 380.60 -3.52%
DABUR 126.50 -2.65%
ICICI BANK 405.55 -2.51%

END OF DAILY UPDATE : 20-JUNE-2005