According to a dealer at foreign brokerage house, ``Since they were ruling at very low prices further panic selling on account of political uncertainity provided institutional investors with an excellent opportunity to acquire PSU stocks at throw away prices.'' According to marketmen domestic mutual funds were today seen picking up PSU stocks at lower levels.

Domestic funds which have been booking profits in the sectors like software, pharmaceutical and FMCGs, are now shifting to PSU stocks, say market players.

Why PSUs stocks? One doesn't have to look far for the explanation. One, these public sectors are market leaders in their respectivesectors. Two, with the early signs of the revival in the economy, the outlook for future also appears to be good. Last but not the least, most of the PSUs stocks have been trading at very attractive valuations.

Take for the instance, Bhel is currently changing hands at Rs 160 discounting its earnings by only five times. MTNL, the market leader in the telecom services industry, on the other hand, is enjoying a PE of just 6.5 times.

On Wednesday, MTNL opened at Rs 140 but soon exhausted the daily limit of eight per cent when the scrip crossed Rs 150.1. The company is considering of further lowering the internet service tariff while expanding capacity in Mumbai and Delhi to 20,000 subscribers each from the existing 5,000, say analysts. MTNL will also be aggressively marketing its other integrated network (IN) services like premium services, virtual private phone network and free phone services. The company has also started direct marketing to approach high end-users of basic telephone services in Delhi andMumbai.

The company's board is meeting on Thursday to approve financial performance for the fiscal 1999. Bhel today opened at Rs 157.10 and soon dropped to Rs 148 (its 52-week low) but buying by domestic players pushed the stock to hit the upper limit of the filter at Rs 162.50. However, the stock closed marginally lower at Rs 160. The company today has bagged a prestigious order worth about Rs 255 crore from the Tamil Nadu Electricity Board. HPCL and BPCL stocks were also in limelight today. Since the beginning of the recent political turmoil (April 5) refinery stocks were badlly hammered but in the last two trading sessions they have witnessed a correction. HPCL was trading at Rs 194 on April 1 but panic selling following the political upheavel at the centre brought the stock to Rs 139 levels. On Wednesday the stock closed at Rs 158.7, exhausting its daily limit of eight per cent. The fall in the case of BPCL was even steeper. The scrip was changing hands at Rs 205 on April 1 but fell to as low as Rs130.7. Since Monday the stock is on the recovery path and today it closed at Rs 144.6.