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Partha Pratim Sinha
Mumbai, July 7: A number of scrips which are not part of the Sensex or have relatively low weight in the index have been hitting new 52-week highs in recent days. Even on a day when the Sensex witnessed a small correction falling by around 11 points, Hindalco, ICICI, Gujarat Ambuja Cement and L&T-- the Sensex scrips, and another six non-Sensex scrips from group A of BSE hit a new 52-week high. Moreover, these scrips also closed higher than their respective Tuesday close. Three other scrips -- Asian Paints, GNFC and Procter & Gamble -- touched a new high before closing lower than Tuesday's prices.
The combined weight of the four Sensex scrips is only 8.30 per cent. While Hindalco touched a new high at Rs 750 and closed at Rs 747, ICICI touched Rs 90.90 and closed at Rs 86.40. For Gujarat Ambuja Cement the high and the close were at Rs 350 and Rs 344, and for L&T the corresponding figures were Rs 330.5 and Rs 323, respectively.
The latter group, the non-Sensex stocks, include Ashok Leyland, Bilt, Ceat,Century Textiles, Garware Wall-Ropes and Sterlite. Some of these scrips have been scaling new peaks irrespective of the overall sentiment in the market.
On Wednesday, the markets went in for a small correction. Brokers expect a bigger correction is due very soon. Although the banking major and index heavyweight SBI went up on the back of some big orders from a FII broking house, the brokers were betting on a select small cap stocks for some quick gains before the correction sets in in a big way. Reflecting the market sentiment, the BSE Sensex closed with a net loss of 11.19 points at 4321.49 points, while the S&P CNX Nifty went up marginally to close at 1243.70 points-- a net gain of 2.45 points. Wednesday was the first day of trading on the NSE during the current account.
The Sensex opened marginally higher at 4340.10 and between 11.30 am and 2.30 pm remained stagnant around that level. According to brokers, this reflects that there is supply pressure which is not allowing the market to move upward. Andmost of the supply was from the FIs and small banks. During the day the Sensex had touched a high of 4373.02 and touched a low of 4306.49 points. During the last half-hour the index lost around 50 points and closed lower at 4321.51 points against its Tuesday close of 4332.70 points. Brokers expect the correction to set-in any time.
``I expect a major selling pressure to come either on Thursday or on Friday morning. We can expect a correction of around 150-200 points. And given the supply pressure in the pivotal counters that we have been witnessing for the last two days, any correction is likely to have a major impact on the prices. Index heavyweights might hold the Sensex for sometime, but the side counters would see their prices going down,'' says Chirag Sanghvi at Asit C Mehta Investment Intermediaries.
Mahindra & Mahindra was the star performer of the day. On Wednesday, around 9.6 lakh shares of M&M changed hands on BSE and according to brokers, FIIs were the major buyers in the counter. The scripgained Rs 22 to hit the upper circuit at Rs 297 and closed at the same level. On Tuesday, also the counter saw around five lakh shares changing hands. Market players say that with the forecasts for a normal monsoon (which will boost its tractor sales) and the company's multi-utility vehicle segment doing better than its peers, the FIIs are upbeat on the company.
During the day's trading, a number of small cap stocks were on the circuit. According to Sanghvi, this is because the speculators are not bullish at the 4350-level and are now shifting focus to low cap stocks. ``Even if pivotals go down in a major way, banking on low cap stocks can limit their losses,'' said Sanghvi.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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