The Telegraph
Since 1st March, 1999
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Stocks scale 30-month peak

Mumbai, Aug. 8: Shares vaulted to their highest point in over 30 months a day after a government report showed the economy was poised for a sharp upturn.

Dalal Street, where the Bombay Stock Exchange leapt 77 points to rack up a gain of 142 points in two straight sessions, was awash in optimism about growth and the prospects of rosier year-end corporate scorecards.

At the heart of the feel-good factor was finance minister Jaswant Singh’s upbeat assessment of farm output and industrial production, underpinned largely by the generous spells of rain. “Foreign and local funds showed great appetite for shares,” an analyst said.

At its close of 3,883.76, the sensex was up 2.02 per cent, taking to 32 per cent its gain in three months. It hit an intra-day high at 3890.78 before finishing 76.93 points higher; NSE’s nifty went up 2.15 per cent to 1222.65.

On the BSE, gainers outnumbered losers in the ratio of 1151:615. “We are now in a bull orbit. But, what is worrying us is that whenever the indices go up by 60-70 points, the turnover moves down,” the analyst said.

The combination of sparse volumes and spiralling share prices is seen by market watchers as a sign that fewer buyers are willing to strike deals in times of a rally. “This means that big investors are not willing to buy shares at high prices,” a broking house analyst said.

Though the quantum of shares traded on Dalal Street was higher at Rs 1744.92 crore today, against Rs 1413.88 crore on Thursday, operators said it was still too skimpy. “Institutions, for one, wait for a correction to set in before start buying stocks again,” one of them rued.

The day belonged to oil and refinery stocks. Reliance was one of them, closing with handsome gains on sustained purchases by domestic and foreign funds.

Telecom stocks, however, witnessed a mixed trend with MTNL and Bharti Tele suffering mild reverses. Steel shares were sought after as market grapevine dripped stories of another price hike soon. The companies had hiked product prices earlier this month.

Among the major gainers today were HPCL, BPCL, IOC, SCI, Tisco, SBI, Lever, BSES, Grasim, HDFC, HCL, ITC, Ranbaxy and ICICI Bank. A good monsoon, and the much hoped for trickle-down effect in the rural markets, brought shares like Lever back in favour. Tata Steel was the top traded stock with a turnover of Rs 136.81 crore, followed by Reliance and SBI.

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