The Telegraph
Since 1st March, 1999
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Scanner on penny, not rally

Mumbai, Sept. 27: The sensex soared past the 8500-mark today, hoisted by an investor rush to consummate deals in time for the close of derivatives contracts for September.

The gains were achieved amid intense volatility, an indication for many analysts that a correction was around the corner. The spurt came on a day the government stuck to its guns on a probe into penny shares.

The 30-share index opened at 8497.25, swung in a 141-point range of 8585.76 and 8444.98 before ending at a new peak of 8525.52. This was a rise of 46.61 points over Monday’s 8478.91.

At its intra-day high of 8585.76, the gauge bettered its last record of 8521.75 on September 21; at close, it was higher than the September 20 finish of 8500.28. Bank and oil companies were among the day’s best performers.

Institutions were the big buyers in the rush among operators to square up positions before the end of September contract in futures and options (F&) on Thursday.

As Dalal Street lost sense of gravity, the hangover of a market probe refused to go away. Finance minister P. Chidambaram said Sebi would scan the way penny stocks have shot up in the recent rally, but believed there was nothing in the wider market to suggest a manipulation.

“Speculation is part of capital market activity. Therefore, we should not get unduly excited when the market rises or falls. The government is not against speculators but manipulators,” the minister said in Delhi.

He asserted the boom in blue-chips was justified since these firms had fundamentals to justify high valuations, and would soon prove that in their second-quarter results.

Another pointer to the robust health of India Inc lay in the revenue-collection figures that showed a record 55 per cent increase in first-half corporate tax collections.

FIIs, the driving force behind the stock juggernaut, continued their spell of buying, picking up shares worth Rs 199.30 crore on Monday. They were joined by domestic mutual funds, which shovelled Rs 133.44 crore.

Volumes on BSE were brisk, with the turnover rising to Rs 3938.94 crore from Rs 3147.90 crore on Monday. Reliance topped the turnover-chart with a tally of Rs 251.34 crore, followed by Bharti Tele (Rs 172.08 crore), Reliance Capital (Rs 139.31 crore) and SBI (Rs 128.52 crore).

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