Deliveries up 80% on SEs

FIIs turn net buyers, picks up Rs 1,183 crore worth of shares in July.

Operators and foreign institutional investors (FIIs) seem to be stocking up Indian stocks again. The delivery volume has jumped a whopping 80 per cent in July over the level in June.

In July 2004, investors bought 2.8 billion shares for delivery at Rs 27,471 crore, compared with 1.57 billion shares at Rs 22,350 crore in June 2004.

FIIs have made a re-entry into the market as indicated by their net purchase of Rs 1,183 crore in July. Incidentally, FIIs' gross purchases of Rs 10,971 crore accounted for 40 per cent of the total delivery value in July.

This is good news for the market as FIIs have been net sellers at Rs 3,251 crore in May 2004 and modest net buyers at Rs 311 crore June 2004.

There are reasons to predict that the bulk of the deliveries in July has come from operators. While the BSE Sensex has gained 7.8 per cent in a month, other sectoral indices have appreciated 9-12 per cent in July.

The BSE midcap index is up 11.4 per cent, the PSU index is up 10.3 per cent and the consumer durable index is up 10.1 per cent in July.

A quick reading of the price performance of stocks and an increase in the delivery volume suggest that the market has placed its bets on certain sectors.

Steel stocks, for example, recorded a 230 per cent rise in their delivery volume on the back of excellent first-quarter results and a rise in steel prices. As a result, steel stock prices appreciated 38 per cent in the last month.

The delivery volume of trading sector stocks has increased 145 per cent and the stock prices of trading sector companies have appreciated 27.7 per cent in July.

Sugar stocks witnessed brisk delivery on the back of good results. The prices of sugar stocks surged 25 per cent in July, while the delivery volume was up 152 per cent to 13.9 million shares.

Delivery-based buying in IDBI was up 341 per cent in July, to 49 million shares. The stock price is up 60 per cent in a month.

The Steel Authority of India Ltd scrip appreciated 46 per cent in July as investors bought 208 million shares. The NMDC scrip was up 89 per cent as the stock clocked a 100 per cent delivery volume.

The sectors that seems to have fallen foul of investors include the personal care business. With Hindustan Lever recording a 46 per cent decline in first-quarter net profits, the stock witnessed a 175 per cent rise in delivery-based selling in July. The stock price fell 9 per cent in July.

FIIs back in action

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• Investors bought 2.8 billion shares for delivery in July, compared with 1.57 billion in June
• FIIs were net buyers of shares worth Rs 1,183 crore in July
• In May, FIIs were net sellers of shares worth Rs 3,251 crore and modest net buyers at Rs 311 crore in June