The Telegraph
Since 1st March, 1999
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Stocks sizzle on selloff hopes

Mumbai, May 26: The Bombay Stock Exchange (BSE) sensex finished 46.85 points higher in a leap triggered by hopes that the sale of state-owned firms, stalled by mounting political resistance, will get off the ground.

The buying in these shares have led analysts to believe the market could soon have an enduring rally, one that will be strengthened if monsoons arrive as expected.

There was little to boost stocks of technology firms, which have been dogged by worries that a resurgent rupee would take a big bite out of the money they make abroad. The spread between what they charge clients and the cost of their services — called margins — is already under squeeze from bargain-driven customers.

The software somnolence was more than made up by the PSU pyrotechnics, driving the 30-share sensex from 3051.30 at start to its intra-day high of 3101.75. It eased a little when it closed at 3096.69 against Friday’s finish of 3049.84, a session-to-session advance of 1.54 per cent.

The selloff spark was re-ignited by Friday’s notification seeking bids for an adviser to sell the Centre’s 51 per cent stake in Rashtriya Chemicals and Fertilisers, a move that propelled the company’s share 2.5 per cent to Rs 30.50. Sentiment was also boosted when the divestment of 24 PSUs was put on the fast track.

War-horses like HLL, Bajaj Auto, ACC and Gujarat Ambuja galloped even as reports said that the monsoon will not hit the Kerala coast on June 1.

Rupee hardens

The rupee gained more ground against the dollar, closing at 46.89 after hitting an intra-day low of 46.93. The premia on the dollar were marginally higher.

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