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Our Market Bureau
MUMBAI, Mar 3: The market is having a field day with the Bombay Stock Exchange (BSE) Sensitive index posting a net gain of 406.56 points in three consecutive sessions. It is a rare event in the last decade that the post-budget tradings has generated so much euphoria and the Sensex has gained so much, said fund managers.
The Sensex breached the 3,600 levels today exactly after a period of two years. It was during the week ended March 1, 1997 when the Sensex had crossed the 3,600 mark. On Wednesday, the National Stock Exchange (NSE) also witnessed a bullish phase with the S&P CNX Nifty rising smartly by 36.05 points to 1,051.85 points from its previous close of 1,015.80 points.
The RBI's multiple rate cut annoucement after the markets closed on Monday helped improve Wednesday's market sentiments to a larger extent. According to brokers, the market reacted positively to the recent RBI measures as these would help the market indirectly. ``Financial institutions are sitting on the fence and are notparticiapting as yet. FIIs are on a bull frenzy and are amassing a lot of information technology, pharma and FMCG stocks", said Dilip Bhat, a BSE broker. Reflecting the bullish phase, the 30-scrip BSE Sensex opened at 3,638.56 points, touched the day's high of 3,691.02 points, fell to touch day's low of 3,625.46 points before closing at 3,640.42 points. It showed a net gain of 116.44 points from the previous close of 3,523.98 points. "Banking scrips like SBI, Corporation Bank and shares of financial institutions staged a smart rally on the expectations of increase in their profitability through the RBI's cut in bank rate and the reduction in prime lending rates announced by the commercial banks", said Chetan Shah, director Asian Market Securities. "An aura has built around pharma stocks and no amount of good news is required to prop up these stocks.
The market capitalisation of all pharma scrips put together is still less than the market cap of ITC. The speculators can move on to the pharma bandwagon andthus a rally is imminent", said DV Ramakrishnan, vice-president institutional sales at Motilal Oswal Securities. The market witnessed selling spree an hour before the closing and some of the pharma counters lost their intial gains though they closed higher from their respective previous closes, said brokers. The total turnover on BSE was at Rs 2,277.18 crore and out of 7,340 listed scrips 1,994 were traded during the day. Tobacco giant ITC topped the list of turnover by registering the highest turnover at Rs 331.38 crore, Pentafour Software at Rs 196.37 crore, Reliance at Rs 195.39 crore, Satyam Computers at Rs 170.91 crore, Tata Tea Rs 150.55 crore and Zee Telefilm at Rs 110.45 crore.
Operator-driven rally
FE Investor Bureau/ Delhi
The post-Budget euphoria has been primarily operator-driven. Or so the FII investment figures released by Sebi reveal. On the day of the Budget and on March 1, FIIs contributed only 6 per cent of the total market turnover of Rs 9600 crore. According to Sebifigures, between last Friday and Monday, FIIs pumped in a total of $ 25.4 million (Rs 107.9 crore) into the equity segment. While the gross FII purchases stood at Rs 345.5 crore, gross sales were pegged at Rs 237.6 crore. On the other hand, the post-budget combined turnover of the two prime bourses, the NSE and the BSE, totalled Rs 9593.4 crore. Even if we presume that FIIs did not make any purchases or sales in the market last Friday, the day prior to the budget, the total FII turnover of Rs 583.1 crore is slightly over 6 per cent of the total market turnover.
Seen individually, total FII transaction worth Rs 375.5 crore (Friday and Saturday combined) was just 7.5 per cent of the total market turnover of Rs 4996.52 crore reported on the Budget day. And, Monday's FII turnover as a percentage of total market turnover was even less. Against a market turnover of Rs 4596.88 croer, the total FII turnover on that day was just Rs 207.6 crore, a meagre 4.5 per cent.
Net position dips by Rs 114 crore
Thenet positions on the Bombay Stock Exchange has fallen by Rs 114 crores to Rs 1,219 crores as of March 3. The gross long positions were marked at Rs 1,639 crores and gross short positions at Rs 420 crores. According to brokers, this indicates that the surge in indices has been a mix of institutional participation as well as a considerable chunk of positions being rolled back to NSE from the BSE. Today was the first day of the trading cycle on NSE hence this shift of positions which were built on BSE on Monday. An interesting observation from the long and short positions is that the Reliance Inds counter has witnessed its net long positions fall by 27 lakh shares. The gross short positions on March 3 was at 26.5 lakh shares and gross long at 32.74 lakh shares. Stocks like HLL and ITC have witnessed huge over sold positions. ITC's net short was pegged at 22,000 shares. ITC net long is 24.5 lakh shares which is 3.5 lakh shares lower over Monday's positions on the BSE.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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