The Telegraph
Since 1st March, 1999
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Gored by the gavel, petro twins tank on trading floor

Mumbai, Sept. 16: HPCL and BPCL were savaged on the trading floor today after the Supreme Court said they cannot be privatised without prior parliamentary sanction.

The shares of the two oil companies, whose privatisation will now have to wait until a law to that effect is in place, were dumped by investors rattled by the prospect of a halt to the government’s selloff programme.

HPCL bore the brunt of the jitters, shedding 11.64 per cent, or Rs 45.45, of its value to end at Rs 344.90. It opened at Rs 400.90 and plumbed an intra-day low of Rs 326.

Investors were less harsh on BPCL, which closed at Rs 323.35 in a loss of Rs 6.90 over its previous close of Rs 330.25. This happened because of support from local institutions.

Despite the petroleum pounding, markets rebounded sharply on the back of a hunt for promising stocks. Big operators and foreign institutional investors (FIIs) scooped up steel, cement and technology stocks to make up for the losses suffered in PSU shares.

“The roller-coaster ride in the markets saw the sensex gaining 2 per cent by the end. The resilience in the market is commendable,” said Arun Kejriwal of Kejriwal Research & Investment Services. Karthik Ramakrishnan, an analyst at Sunidhi Consultancy Services, attributed the rally this morning to value buying by operators and foreign investors at lower levels.

“A upward correction has happened after the sensex shed almost 350 points from the top,” Kejriwal added. Analysts say institutional investors who have offloaded huge quantities of PSU shares today will return.

The sensex hit an intra-day low of 4,134.69 early in the session, just after reports of the Supreme Court ruling filtered in, but recovered to notch up an 80-point gain.

Fuelling the rally was a buying binge in the shares of software, banks and pharmaceutical companies at low levels.

That the markets were in the grip of bulls was evident from the fact that gainers outnumbered losers by 956 to 587 on Dalal Street; in all, 17.4 crore shares changed hands compared with 14.1 crore on Monday. The recovery was also mirrored in the broader NSE index, which ended 2.16 per cent higher at 1,357.95 points.

Among the stocks back in favour were those of steel companies. Steel Authority of India, the PSU steel maker witnessing a turnaround in its fortunes, racked up a remarkable increase of 9.47 per cent to Rs 37. Its private sector competitor, Tata Steel, rose 6.96 per cent to Rs 262.70.

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