The Telegraph
Since 1st March, 1999
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SBI gives up gains on FII stake letdown

Mumbai, Dec. 19: Shares of State Bank of India (SBI) trod water today after the finance ministry denied having allowed more foreign equity in the bank.

The stock, one of the market’s darlings has been at the centre of investor attention in the past few days, racing to its five-year high amid reports that the government has accepted the request to prise out GDRs from the 20 per cent cap on foreign institutional money.

GDRs account for 9 per cent of the equity. Treating this separately would have cleared the way for an increase in the FII by an equal amount, boosting share liquidity.

“SBI and other bank scrips have already attracted interest after the passage of the Securitisation Bill. Reports about a hike in foreign investment limit have added to the buying. Therefore, when the government denied the possibility today, it led to selling,” said a broker.

Having opened at Rs 290 and hit the day’s high of Rs 194, the stock plumbed a low of Rs 277.15 before finishing at Rs 278.55 — a loss of Rs 10.40 over its previous finish. In all, 47.87 lakh shares changed hands in 26,942 deals.

Firing hopes is the Securitisation Bill, which makes it easier to seize assets of defaulting firms. Investors hope the new law will slice through the Rs 15,480-crore bad-loan mountain bedevilling the bank.

The SBI shock came on a day the Bombay Stock Exchange sensex ended flat at 3333.86 from 3333.31 on Wednesday. Among those that sizzled were Dr Reddy’s, whose share was boosted by a US court ruling that paves the way for the launch of Norvasc, a Pfizer best-seller.

The DRL scrip put on 5.33 per cent or Rs 46.70 to end at Rs 922.65 — a 12 per cent leap in two straight sessions.

The 30-share index opened at 3332.72 and dropped to its day’s low of 3313.45. However, pre-noon buying propelled it to a high of 3345.67 before it closed a tad lower.

Infosys logged the highest turnover of Rs 174.95 crore, followed by Satyam Computer (Rs 154.43 crore), SBI (Rs 136.19 crore), Digital Global (Rs 108.86 crore) and DRL (Rs 104.14 crore).

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