Select PSU shares rally on heavy volumes

STC, MMTC,Hindustan Copper,BEML, Dredging Corp, Power Finance and BPCL are up 6-17% on the BSE.

Shares of selected public sector undertakings or PSUs have rallied up to 17% on back of heavy volumes on the Bombay Stock Exchange (BSE).

State Trading Corporation of India (STC), MMTC and Hindustan Copper have surged between 12-15%, while BEML, Dredging Corporation of India, Power Finance Corporation, BPCL, HPCL, Indian Oil, HMT and MTNL are up 5-11% on the BSE.

The S&P BSE PSU index, the largest gainer among thematic indices, up 2.25% at 6000, as compared to 0.37% rise in benchmark S&P BSE Sensex at 1200 hours.

Most of the PSU stocks are still trading well below to their 52-week high, though the benchmark indices have touched a new highs on Monday.  S&P BSE PSU index is 15% away from its 52-week high of 7,078 touched on May 20, 2013 and near half way mark from its all-time high of 11,205 hit on January 2008.

There are several reasons for the downturn in PSU stocks include decline in net profit and the government's move to sell shares of some of these companies via offer for sale, at a discount to prevailing market price.

Among the individual stocks STC, the largest gainer among PSU pack, has rallied 17% to Rs 181 on the BSE.  A combined nearly 2 million shares already changed hands on the counter so far against an average sub 0.50 million shares that were traded daily in past two weeks on the BSE and NSE.

MMTC has soared 14% to Rs 54.20, followed by Hindustan Copper (12% at Rs 69), BEML (11% at Rs 273), Dredging Corporation (7% at Rs 29) and BPCL (6% at Rs 439).