Punters in action, momentum stocks up

Some top market operators on Dalal Street are back in action, if a sharp rise in share prices of IFCI, Essar Oil, Spice Communication and some other so-called 'momentum stocks' are any indication.

The operators, known for rigging prices by spreading rumours are having a field day as bourses continue to witness thin volumes on account of low participation by foreign buyers and domestic funds.

Stocks such as Essar Oil, Oswal Chemical (Bindal Agro), IFCI and some information technology company counters have always been a favourite with a couple of Mumbai- and Kolkata-based punters, according to brokers.

"It's easier for these operators to rig prices of Essar Oil and IFCI as they have cornered a chunk of these shares earlier," said a dealer.

Brokers are of the view that punters want to finish off their game before the newly introduced stock lending and borrowing scheme gains momentum, wherein investors could borrow and short a particular stock if they feel the price was artificial or way above its fare value.

The stock lending and borrowing scheme, which was introduced in the domestic market from April 21, has witnessed only a single trade on the RIL counter.

Brokers said it had become easier for operators to manipulate stock prices of new listings as a rule allowed Indian promoters to dilute a nominal 10-15 per cent of their stake through IPOs, if share offerings were Rs 100 crore or above.