MUMBAI, July 10: Ten stocks have outperformed the Sensex during the past seven months giving an annualised return ranging between 116 and 188 per cent.

The buying spree, that began mildly from mid-December 1996, and gathered momentum since March this year, has witnessed the Sensex jumping by almost 60 per cent - from around 2,745 on December 4, 1996 to 4,404 on July 9, 1997. During the same period, the BSE 200 Index registered a 54 per cent rise to touch 420.72 from 273.42 points.

On an annualised basis, the jump in the Sensex was 102 per cent while it was more than 93 per cent in the BSE 200.

However, of the 30 Sensex stocks, some 10 stocks have outperformed the Sensex and the BSE 200 during the seven-month period under review, and four of these have jumped more than 100 per cent. Barring just two -- Grasim and Indian Hotels - all other Sensex stocks have recorded hefty gains. The prices of these two stocks climbed only by 7 and 1 per cent respectively during the seven-month period from December 4,1996 to July 9, 1997.

ITC topped the list recording a jump of 110 per cent, which on an annualised basis was 188 per cent. It was followed by Glaxo galloping by106 per cent, Reliance 104 per cent and BHEL 101 per cent during the seven-month period.Among others that witnessed massive gains were Nestle (89 per cent), Hindalco (88 per cent), GE Shipping (83 per cent), HLL (82 per cent), SBI (73 per cent) and ACC (68 per cent).

``With UTI staying away from selling, the Sensex could witness another 20 per cent jump if the flow of foreign funds continue over the next two months,'' said R Balakrishnan, chief research analyst at Dilvikas Financial Services Ltd.

According to Balakrishnan, the FII buying has been concentrated only in the Sensex stocks and the free float of stocks is fast drying up -- earlier it was placed at around 35 per cent, with financial institutions, the promoter-owners and the public holding the balance. Currently, the percentage of such stocks floating in the market is placed at around 10-15 per cent. With the speculators riding the FII bandwagon, the fear that is disturbing a section of operators is: What would happen to the market if the FIIs and speculators both desire to offload their investments for any reason.

Some of the leading operators now prefer to tread a cautious path and watch for the July 25 date on which the Congress party is said to be announcing its future plans of its support to the Gujral Government. During the past few weeks, a section of FIIs have preferred to divert some of the global investible monies from Phillipines, Malaysia and Thai markets to Indian markets. It remains to be seen how long this FII flow continues to prop the market and keep the sentiments buoyant for the fundamentals of the economy do not give optimistic signals.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.