The Sensex started the day on strong note, but settled with marginal gains, amid high degree of volatility. A smooth rollover of positions in the derivatives market and firm Asian markets triggered a rally in first half of the day, taking the Sensex to highest level in nearly four months since 9 February 2007. However, sustained selling since afternoon on profit taking at higher levels capped gains.

The 30-shares BSE Sensex settled 10.14 points higher at 14,554.60, as per provisional closing. It opened higher above the 14,600 mark at 14,610.28 tracking firm Asian markets and also surged to strike an intra-day high of 14,682.10, by noon trade. This is its highest level in nearly four months since 9 February 2007.

The Sensex was not able to strike all time high. It had hit an all-time high of 14,723.88 on 9 February 2007.

However, the S&P CNX Nifty, managed to strike all time high of 4,325.80 by afternoon trade today. It settled with marginal loss 0.50 points to 4,295.30, as per provisional closing.

As per market data, marketwide rollover in the derivatives market was 82.8% on 31 May 2007, the last Thursday of the month. This is slightly higher than 82.5% during the April expiry. Nifty Futures rollover was 75% as compared to 71.7% in the previous expiry. Higher rollover of positions indicates a bullish trend.

The total turnover on BSE amounted to Rs 4,669 crore compared to Rs 3,573 crore at 14:30 IST.

The breadth, which indicates the overall health of the market, was positive on BSE, with 1,377 shares advancing as compared to 1218 that declined. 94 stocks remained unchanged. In the opening session, the breadth was strong when 1,141 shares had advanced as compared to 436 that had declined.

All the European markets, except Italy’s MIBTel index (down 0.01%) were trading with gains, while most of Asian markets advanced. The Nikkei average rose 0.47% to close at its highest in three months on Friday, 1 June 2007, as trading firms rose on Morgan Stanley's higher target prices and retail investors bought steel and other value stocks. The Nikkei added 83.13 points to 17,958.88, the highest close since 27 February 2007.

The Hang Seng index was down 0.15% or 31.60 points to 20,602.87

Among the 30-member Sensex pack, 17 advanced while the rest declined.

Pharma major Cipla advanced 2.92% to Rs 224 on 10.88 lakh shares, and was the top gainer. Buying interest seems to be returning in the stock after it had plunged sharply, when it had announced poor results late last month.

Shares from banking sector advanced despite market rumors of hike in CRR, due to easy liquidity in the money market and the RBI’s latest predisposition to use this blunt tool to suck out liquidity. ICICI Bank (up 1% to Rs 928), State Bank of India (up 1.67% to Rs 1375), and HDFC Bank (up 1.65% to Rs 1158.50) advanced from banking and financial space.

Analysts expect a CRR hike of 25-50 basis points (100 basis points make 1%) from RBI to suck out liquidity in June 2007, when the equity market will see big issues (DLF and ICICI Bank) and high foreign inflows are expected.

They see Reserve Bank of India (RBI) continuing to tighten its fists on the monetary side, after the government, on Thursday, 31 May 2007, announced sparkling gross domestic product (GDP) growth of 9.4% in the year ended March 2007

IT pivotals posted gains for the second straight day today on renewed buying despite rupee inching towards its recent high. IT scrips had remained weak over the last few weeks. Satyam Computers (up 1.15% to Rs 475), TCS (up 0.89% to Rs 1219.35) and Infosys (up 0.87% to Rs 1937) rose.

IT stock have not performed in the market's recent surge due to stronger rupee. A rise in the rupee directly impacts revenue and profit of IT firms, which derive a lion’s share of revenue from exports to the US.

Rupee inched towards a recent a nine-year high today, 1 June 2007, as traders anticipated a burst of capital inflows into local equities, but was blocked again by state-run banks which bought dollars.

State-run engineering major Bharat Heavy Electricals advanced 0.86% to Rs 1,411. It had turned ex-bonus (bonus ratio 1:1) yesterday, 31 May 2007. Buoyed by liberal bonus issue and capex of Rs 3,200 crore to increase manufacturing capacity from the current 6,000 Mega Watt (MW) to 15,000 MW per annum, the stock has been buzzing on the bourses since the past few days.

Index heavyweight Reliance Industries (RIL) shed 0.76% at Rs 1,746.85 on 4.55 lakh shares. It surged to an intra-day high of Rs 1779, while its low for the day was Rs 1,745.30. It’s all-time high is at Rs 1,785.

Auto stocks were under selling pressure. A rise in crude oil prices coupled with margin pressure concerns pulled these stocks lower. Hero Honda declined 2.63% to Rs 713.10, on 1.14 lakh shares. Tata Motors (down 1.40% to Rs 747), and Maruti Udyog (down 0.91% to Rs 810.20) edged lower.

ITC (down 1.41% to Rs 161.30), Bharti Airtel (down 1.53% to Rs 834.80), and HLL (down 1.23% to Rs 201), were the other losers.

On Thursday, 31 May 2007, the Dow Jones industrial average slipped 5.44 points, or 0.04%, to 13,627.64, after reaching a new all time high of 13,673.07. On Wednesday, 30 May 2007, the Dow had surged over 111 points and set a new closing high of 13,633.08.

However, the broader stock indices managed gains. The Standard & Poor's 500 index advanced 0.39 point, or 0.03%, to 1,530.62, after soaring to a record close Wednesday, 30 May 2007, for the first time since March 2000. The technology-dominated Nasdaq composite index showed more pronounced movement, rising 11.93 points, or 0.46%, to 2,604.52.

As per provisional figures, FIIs were net buyers of Rs 168.86-crore equities, while domestic institutional investors (DIIs) bought a net Rs 32.19-crore equities, on Thursday 31 May 2007

Crude oil prices rose on Friday, 1 June 2007, after a US government weekly fuel supply report showed an unexpected decline in crude oil stockpiles. Light, sweet crude for July 2007 delivery added 17 cents to $64.18 a barrel in Asian electronic trading on the New York Mercantile Exchange, mid-morning in Singapore.

Sterling performances by services and manufacturing sectors helped Indian economy grow 9.4% in 2006-07, the fastest rate in 18 years.

The growth even exceeded the government’s projection of 9.2% and is next only to 10.5% GDP expansion achieved in 1988-89. The figures were impressive also from the point of view that it is on the high base of 9% growth in 2005-06.