On Friday, operators were able to hide, atleast for sometime, the heavy selling they had resorted to in the infotech counters behind the facade of some revival in the market benchmark Sensex by keeping the prices of HLL and ITC higher.

While the FMCG major closed at the initial 8 per cent upper circuit level, the ITC scrip closed Rs 30 up, keeping the Sensex at 4186, a net loss of only 21 points over its previous close. According to a dealer with a domestic brokerage house, had the two index-heavyweights remained unchanged at Thursday's level, the Sensex would have been somewhere around the 4100-mark.

But the brokers believe that is not very far off. According to market players, now that the operators have made the infotech counters weak, the retail mass, the weak operators as well as the funds might follow suit. "Now the mutual funds might face some redemption pressure, which in turn, might force them to sell in the market," said a BSE broker. According to an institutional dealer, with the recent weakness in the market, especially in the new economy stocks, the index can go down to as low as 3850 level.

On the FII front, according to Sebi figures, net inflow was to the tune of Rs 46.8 crore from a total turnover of Rs 525 crore. Though the FII investment turned positive for the day, the market feels that it would take some time for the foreign investors to start buying again in the Indian market. According to brokers, they will come back only after the rupee stabilises.

Although the first session was relatively quieter, the second half of the day was bad for software stocks. A near-panic selling gripped the software stocks. The fall was triggered by DSQ Software which was first to hit the lower circuit of 16 per cent. Global Tele also hit the lower circuit of 16 per cent. Other stocks which lost heavily were Satyam Comp, HFCL, Silverline, Rolta, Dig Equipment, SSI, Wipro, and HCL Info.

The Sensex opened at 4241.23 points, touched a high of 4266.21 points, and closed at 4186.16 points. The low for the day was 4155.45 points. At the same time, S&P CNX Nifty also dipped seven points, and closed at 1313.60 points. The low for the day was 1302.65 points, and the high for the day was 1333.15 points.

On the BSE, the number of advances stood at 481, the number of declines at 1002 and around 153 stocks remained unchanged. The trading volume on the BSE stood at Rs 3,850 crore, and the same figure on the NSE was Rs 5,257 crore.Meanwhile, stocks which gained more than 7.9 per cent were Guj Gas, Twinstar Soft, Vital Com, Magan Ind, Sarvodaya Lab. Other gainers for the day were HLL, Bom Dyeing, Mirc Elect, Top Cassettes, Asian Paints, Veronica Lab, Tata Hydro, MP Tele, Sulzer. At the same time, stocks which dipped more than 7.9 per cent were Satyam Comp, Zee Tele, Global Tele, HFCL, Wipro, Silverline, DSQ Soft, SSI, Dig Equipment, HCL Info, Aptech, Shyam Tele, Hinduja Finance. Other losers for the day were Pentamedia, Rel Capital, BPL, VSNL, Tata Elxsi, IPCL, Century, McDowell, Ashok Leyland, Vikas WSP, GV Films.

Pivotals fall unnervesCalcutta-based brokers
Mumbai, Aug 4: The sharp fall in prices of some pivotals in the last couple of settlements has taken its toll on some brokers, particularly from Calcutta. It is learnt that some of them have suffered substantial losses on long positions held mainly in DSQ Software.

The problem exposure is not known but market estimates put the figure in the region of Rs 20 crore to Rs 25 crore. Fortunately, the problem relates to positions parked outside the official system which is secure with the stringent margining mandated by Sebi.

The affected brokers, incidentally, have been forced to square up their positions in the last two three days so that their liabilities are frozen. Knowledgeable sources maintain that these brokers would be able to meet their liabilities in the course of the next week when funds becoming due for payment.

An idea of the problem exposure is, however, available from the sharp reaction in the price of scrips like DSQ and Satyam in the span of last four settlements.

The mark-up price for DSQ in the settlement ended July 6,2000 was around Rs 1,100 compared to Rs 630 at the end of last settlement on Aug 3. The near Rs 500 difference on outstanding positions of a couple of lakh DSQ shares would translate into a liability of about Rs 10 crore. By end of session on Friday, the price of DSQ had fallen further to Rs 491 which makes squaring up of residual positions, if any, even more painful.

-- Dheer Kothari & Partha P Sinha