Bourses Rise On Brittle Ground

After a flat start, bourses gained ground aided largely by bargain hunting in select shares.

The Bombay Stock Exchange sensex rose 21.76 points, after swinging in a range of 53 points. It touched an intra-day high of 3276.06 and closed at 3264.02. The National Stock Exchange S&P CNX Nifty rose 7.12 points to end at 1,070.05.

According to brokers, the undercurrent remains shaky due to recent heavy foreign fund sales. "While the Unit Trust of India (UTI) has been a persistent seller in index stocks, it is the sustained selling pressure from FIIs that is worrying us," a dealer from a local brokerage said.

FIIs remained net sellers for the third straight session on Tuesday (June 18, 2002), pulling out a net Rs 94.20 crore. While FIIs have pulled out a net Rs 300.80 crore in four trading sessions, they have remained net sellers to the extent of Rs 402.20 crore for June 2002.

Investors resorted to bargain hunting -- notably in tech stocks -- after a recent fall from the higher levels. "There has been huge supply over the past few days both from foreign and domestic institutions, which is yet to be absorbed," said the head of sales with a domestic brokerage. The market is expected to end with minor losses, he added.

Kashyap Mehta, head of equity sales at Moneypore.com, said: The broad market sentiments are improving and attractive valuations and couple of positive news on the border and international front is helping the markets. We saw some selective buying in tech pivotals. Investors, however, should maintain caution because of selling pressures."

Technology stocks staged a rebound after a string of recent losses. Infosys Technologies was up 3.13 per cent to Rs 3,249.30. The stock rose after the banking business unit of the company today announced that it has acquired the trade IQ product division of US-based IQ Financial Systems Inc for $3.9 million.

Other tech pivotals such as HCL Tech moved up 2.40 per cent to Rs 208.95 and Satyam Computer gained 2.15 per cent to Rs 220.65. The stock rose on bargain-hunting.

MTNL also saw a gain of 4.12 per cent to Rs 152.85 advanced further amid rumours that the PSU may consider a special dividend for fiscal 2001-02. On Tuesday, investment bank Goldman Sachs upgraded its rating on the stock to 'market out-performer,' citing expectations of an increase in telephone call and rental charges, and attractive stock valuation.

State Bank of India moved up 1.53 per cent to Rs 242.40 after the bank announced impressive fourth quarter results. For the quarter ended March 31, 2002, SBI posted an 80.26 per cent rise in net profit to Rs 615.69 crore on an income of Rs 9,040.09 crore.

There was selling in pivotals such as Zee Telefilms which was down 1.77 per cent to Rs 127.70, ITC was down 1.18 per cent to Rs 605.50 and Reliance Industries was down 0.40 per cent to Rs 285.70 limited the gains of the Sensex.