Cautious Bulls Sheath Horns

Every passing day seems to be adding to the gloom at the bourses. Volumes continue to shrink as foreign funds too seem to be fence-sitting at the moment. This, in turn, is discouraging speculators, who are maintaining a low profile for the time being.

With neither good news in the offing nor FII money flowing in, bulls are not willing to take up any large positions for fear of being caught on the wrong foot. With no immediate bad news in the offing either, bears also are waiting for some large-scale genuine selling before they can get into the act.

 

Domestic institutions, however, seem to be using this opportunity for bargain-hunting as is evident from the positive FI figures being witnessed over the past couple of trading sessions.

Yesterday, they were reported to have made a good amount of purchases in pivotal stocks, though this did not have any significant impact on the sentiment.

The UTI was reported to have been an aggressive buyer at the Indian Hotels counter yesterday. It is reported to have purchased nearly 50-60,000 shares of the scrip at around Rs 325 levels. It is also reported to have made purchases at the ITC counter to the same extent.

UTI was also reported to be buying at the Thermax and Wockhardt counters yesterday. Last week, UTI is reported to have purchased over a lakh shares of Wockhardt.

The LIC and SBI Mutual Funds, too, have turned active buyers over the past couple of trading sessions.

On Monday, a foreign fund is reported to have sold around 2.75 lakh shares of the L&T scrip. Yesterday, too, the fund was reported to be a seller at the counter.

A pension fund is reported to have sold around 65,000 shares of the Zee Telefilms scrip on Monday. This scrip figured on the FII sell list yesterday, too.

The offshore fund of a bank is reported to have picked around 60,000 shares of the Satyam Computers scrip on Monday.

Buying interest was also witnessed at the HLL counter with a Hong Kong-based brokerage reportedly having picked up around 22,000 shares of the scrip on Monday.

A Hong Kong-based brokerage is reported to have picked up 5 lakh shares of the Coates Viyella scrip yesterday. It could not be confirmed whether the purchases were on behalf of a foreign or local institution.

Another illiquid counter which has been witnessing a spurt in volumes over the past couple of trading sessions is the Tamil Nadu News Print scrip.

The scrip clocked trading volumes of over 2 lakh shares on the BSE on Monday and close to a lakh shares on the BSE yesterday.

Foreign funds are reported to be showing keen interest at the MTNL counter over the past couple of trading sessions.

On Monday, two FII brokerages purchased around 3.5 lakh shares between them. It could not be confirmed whether both the brokerages were acting on behalf of the same fund. The firming up of prices seems to indicate some kind of buying interest at the counter. The shrinking volumes and the resulting drop in revenues for the brokers at the bourses has forced the broking community to look at Resurgent India Bonds (RIBs) to make a quick buck. Since no brokerage will be offered for mobilisation below $100,000, small brokers have joined hands in order to meet this limit. It is learnt that some of the smaller brokerages have decided to act as sub-brokers to the bigger players and even to some of the leading foreign brokerages.

RIBs will be open for subscription from today and the brokerages offered have been extremely attractive. For instance, for a mobilisation up to $5 million, the brokerage offered is 0.5 per cent and for any amount above $100 million, the brokerage has been fixed at 1.5 per cent. The brokers should be a happy lot now that they have something better to look up to.