The Telegraph
Since 1st March, 1999
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Poll vault lifts stock sentiment

Mumbai, Dec. 4: The market was excited about the BJP blitz in three of the four states that went to polls, saying the overwhelming mandate will re-ignite rapid-fire reforms.

The modest rise in BSE sensex — four points at 5225.90 — masked the markets’ response to the saffron sweep but operators believed the outcome will boost reforms and a triumphant BJP will muster more courage for changes in the way the economy is managed. BSE-100 index went up 17.38 points at 2683.56.

“We are happy they have won. Any party that is pro-reforms and for privatisation has our support,” said a fund manager affiliated to an asset management house.

A small section shrugged off the polls and their impact, their eyes were glued to the trading screens instead. “Actually, we are not looking at the results. These are short-term triggers. What we are watching is that the markets focus on fundamentals, recognising new stock ideas of fundamentally strong mid-cap companies,” a dealer said.

In a bullish market, he said, poll outcomes only “fuel” a trend, they do not generate it. “Generally, the key long-terms trigger centre on the fundamentals”, he added.

In the spotlight were Reliance Industries, ITC and Lever. The former gained Rs 11.95 at Rs 508.25 on rumours of a stock spilt; the latter rose Rs 2.45 to Rs 181.35. The other prominent gainers were ITC (Rs 24.45), HDFC (Rs 14.20), HDFC Bank (Rs 5.70) and HPCL (Rs 10.95)

As the balance of power shifted in a large swathe of the country, a less noticed, but more important, tilt on the trading floor changed market equations. It was the resurgence of mid-cap stocks as operators discovered them to be full of promise — the moment of the minnows.

“A tectonic shift is happening as mid-caps are being looked afresh by broking outfits due to their improved fundamentals,” a broker said.

The shift towards the “small wonders” of the market could be seen in the fact that 292 such shares hit historic highs on key exchanges. By contrast, the heavyweights, barring Reliance Industries and ITC, got the rough end of the stick.

The volume of business on BSE fell to Rs 2713.70 crore from Rs 2387.16 crore on the previous day. Reliance was the most active share with a turnover of Rs 376.54 crore.

NSDL fee cut

National Securities Depository has cut the charges for debit instruction to Rs 8 from Rs 10 and the corporate fee to Rs 6 per record from the Rs 10 at present. The reductions would be effective January 1.

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