Sensex Movements Identification Factors

Period

Remarks on the Market / Sensex

Quarter - 4

(Jan'05 to Mar'05)

• Heavy selling pressure continued.
• Threat of inflation.
• Hike in interest rate.
• Dollar was strong.
• Slowdown in foreign fund flow.
• High international crude oil price.
• Q-3 results of corporates.
• Good buy in cement, auto, bank and IT segment.
• Quota system was introduced in Textile industry.
• IPO size of over Rs.4500 crore hit the primary market.
• Increase in FDI capital in telecom industry – 74%
• US Poll results – IT in favour.
• Govt. clears autonomy package for PSU banks.
• Govt. allows 100% FDI in construction sector.
• Mergers like: Dabur-Balsara, Mahindra-Renault etc.,

Quarter - 1

(April'05 to June'05)

• Implementation of VAT.
• Special Economic Zone Bill 2005.
• Huge investment by FII's – because in expectation of interest rate cut in US.
• Announcement of banking reforms on – acquisition, revision of SLR and CRR & rising of dividend ceiling.
• FY-05 NP increased for most of premium companies.
• Mid cap companies too showed a high positive results in their previous FY.
• During month May'05 the Sensex raised upto 468 points.

Quarter - 1

(April'05 to June'05)

• Sensex sets new record at 7178 in the beginning of June'05.
• Ambani brothers settlement.
• Stronger money flow started.
• FII's restarts pumping investment in to Indian stock market.
• Mutual Funds did a good business.
• IT export growth expected @ 30%
• Monsoon sets in India.
• PSU banks and Private banks performed well.

July 2005

• Corporate governance issue of Reliance Company.
• Strong FII's inflows.
• RBI released the BOP data for 2004-05.
• Banking stocks were in the limelight.
• YES bank listed its share on July 12^th.
• India and US agrees to 8 major initiatives.
• Tax Protocol comes into effect on August 1^st so that Indian companies can access Singapore technology at lower cost.
• China finds Indian cotton yarn attractive. Textile companies finds a good time.
• ICICI bank enters and exits NTPC.
• Profit making PSU's to get more financial autonomy.