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Our Market Bureau
Mumbai, Oct 14: After two consecutive days of bear hammering, shares staged a smart recovery today. Short covering coupled with select purchases at the banking and infotech counters saw the BSE-30 sensitive index rebound from the day's low of 2,799 points to close at 2,890.72, registering a net gain of 58.69 points.
FIIs continued to be net sellers for the seventh consecutive day. They sold shares to the tune of Rs 43 crore. However, some FIIs (Capital International and Socgen Crosby Securities) were rumoured to have placed huge buy orders at the counters of Infosys Technologies, ITC, Satyam, Wipro, Bhel, SBI, Castrol and Bajaj Auto.
Interestingly, even local institutions were net sellers on the bourses. They sold a net quantity of Rs 5 crore on the National Stock Exchange and Rs 1 crore on the Bombay Stock Exchange. However, institutions led by UTI and LIC were rumoured to have bought selectively at counters like Wipro, SBI and Bajaj Auto.
"The US-64 fear, followed by panic sales had createdsubstantial short positions in the market which needed to be covered up," explained Hiren Ved of Prime Securities, in the light of the sharp recovery from the intra-day's low of 2,799 to a high of 2,909 points. The short positions on BSE gone up by Rs 40 to touch a high of Rs 403 crore, while the long positions remained steady at Rs 913 crore.
Banking stocks once again gained favour on the bourses on the news that the finance ministry would restructure the NPA's of. Expectations from the busy season credit policy, to be announced on October 30, also aided the bullish sentiments in these counters.
SBI led the rally, while Corporation Bank, ICICI Bank and Global Trust Bank followed suit. Most banking scrips were locked on the upper limit of the price band on local bourses. Templeton was rumoured to have picked up huge chunks of SBI.
After having traded at a discount of 21 per cent to its GDR, the SBI stock gained momentum to hit the upper-end of the price band at Rs 166.25. The counter witnessed aphenomenal volume of 1.35 crore shares. Sources hinted that the sharp rise in the GDR price had attracted FIIs to the local market to reap the benefits of arbitrage opportunities.
The GDR markets also registered a handsome recovery to trade at 526.44 points during mid-session. The SBI GDR inched up by 2.52 per cent to trade at $ 9.15, reducing the premium from a high of 21 per cent on October 13 to 15.66 per cent. However, in the case of Reliance, its GDR continued to be traded at a discount of 6.15 per cent at $ 4.88 against its underlying stock price of Rs 109.50.
Stocks of financial institutions also found the fancy of investors once again. After being hammered down to new lows on fears of high NPS levels, the FI stocks today saw a reversal in trend. Led by IDBI, the FI stocks staged a smart recovery. IDBI gained over 7 per cent to close at Rs 39.85 as against Tuesday''s close of Rs 47.75, while IFCI was up 6.9 per cent to Rs 19.25. ICICI moved up marginally to Rs 46.90.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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