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PSU party fuels Friday frenzy

Mumbai, Dec. 6: Investors toasted the end of deadlock on sale of state-owned companies by giving Dalal Street one of its most exciting sessions in recent times as the sensex raced past the 3,300-mark in a 77-point leap.

Thursday’s Prime Ministerial intervention to set the stalled selloff in HPCL and BPCL in motion fired hopes on bourses that disinvestment was still on course.

The surge that took the sensex close to its five-month high was fuelled by shares of public sector units (PSU), all of which turned into market flavours overnight. In a frenzy not seen in recent months, investors chased all state-owned companies — even those which had nothing to do with the disinvestment story. What is being seen as a good augury is the fact that the Cabinet had overcome internal divisions only two days before the expiry of the three-month deadline.

Evidence of the trading pattern could be seen in the BSE PSU index, which performed other indices on the exchange by gaining 87.52 points or 5.84 per cent to 1,586.62.

The star of the session was HPCL, which flared up a whopping 22 per cent, or Rs 49.75, on reports that a strategic sale in the company had won over many at the Centre. The stock was the largest percentage gainer on BSE, generating a staggering volume of over 62 lakh shares. The share opened at Rs 260, shot up to a day’s high of Rs 293 before ending the day at Rs 274.85; On the NSE, volumes in the scrip swelled to 1.29 crore shares.

Giving the market leader company were others like BPCL, Nalco, Container Corporation, Engineers India, RCF, Shipping Corporation, Bharat Earth Movers, Hindustan Organic Chemicals, Nevyeli Lignite and several others. BPCL gained 10 per cent to finish at Rs 215.65, Nalco shot up 17 per cent at Rs 100.10, Engineers India zoomed 20 per cent at Rs 2871.5, Neyveli Lignite increased 13 per cent and SCI spiked 14 per cent to Rs 67.70.

“The divestment news was the pep pill the markets were waiting for. The undertone from here on could be bullish, and there is an optimism that the government will also deal with other potential divestment cases,” a broker said.

All eyes are now set on Monday’s Parliament session, where disinvestment minister Arun Shourie is expected to make a statement. “The markets will be looking at what he has to say not only about the two petroleum companies, but also about the entire divestment process. A disappointment on any of these matters could immediately set in a correction,” a broker said.

The volume of business on BSE was Rs 1621.87, up sharply from Rs 1362.31 crore on Thursday. HPCL racked up a turnover of Rs 172.45 crore, followed by Infosys Technologies (Rs 154.81 crore), Zee Telefilms (Rs 150.48 crore) and Satyam Computer (Rs 146.29 crore).

Scanner on HPCL

BSE put HPCL and BPCL on its watch-list today following a massive surge in the prices of these stocks. A whopping Rs 1,688.17 crore was added to HPCL’s market cap. Though these scrips were not subject to the circuit filter criterion, they are under watch as part of our regular surveillance exercise, BSE said. A Sebi official said exchanges will pass on the information to his institution at times of a spike.

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