Foreign Funds Frenzy Propels Scrips

The stocks markets seem to have finally moved out of the bear grip with major indices soaring to new heights during last weeks trading. According to sources, the trading sentiment improved on account of heavy buying made by foreign institutional investors (FIIs).

During last week, the 30-scrip BSE Index scaled 52-week highs on two trading days. The market has come out of the bear phase and the bull phase is here to stay, says Ramesh Damani, a BSE broker.

The Sensex closed at 4323.82 points on Friday against the previous Fridays close of 4133.24, a gain of 90.58 points. The Sensex also touched 4395 during intra-day trading the previous week. On Monday, the market opened on a very strong note and the Sensex closed at 4256.09 points, registering a gain of over 120 points.

 

Fundamentally, nothing has really changed. However, what has actually happened is that the supply has dried down. As a result, even a small order placed with the brokers pushes up the stock prices significantly, says another BSE broker.

Market sources said that the stock prices went up on Monday as it was the financial year ending for many of the foreign funds. These funds generally tend to prop up their net asset value (NAV) on the last day of the financial year in order to project a rosy picture, said another broker.

However, most of the buying was witnessed in the index-based scrips and on the side counters. The small investors have not returned to the market. The activity is still limited to the scrips in the A group, which is not a healthy sign. The market will only revive if the depth increases, added another broker.

The total traded turnover at both the exchanges also went up considerably during the past week.

The trading turnover at the National Stock Exchange (NSE) topped a high of Rs 2,362.35 crore. Incidentally, on the five trading days, the turnover remained well over Rs 1,500-crore with the lowest being Rs 1,614 crore, which was recorded on Monday. On the other hand, the turnover at the BSE touched a high of Rs 1,289.87 crore during the week.

The scrips which hogged the limelight during the previous week were: HDFC, ACC, Tisco and Glaxo among others. With steel majors deciding to raise the prices of hot rolled coil, steel scrips witnessed hectic activity.

NEW DELHI: A few leading heavy-weighted scrips were the star performers on the stock market during the week ended July 4. They advanced mainly on foreign institutional investors (FII) and speculators fancy.

Marketmen said reports that Unit Trust of India (UTI), the countrys largest financial house, would maintain its dividend at 20 per cent for the fiscal year 1996-97, was welcomed by brokers and the investor fraternity alike.

The UTI chairman, GP Guptas announcements that he was bullish on the stock markets during the current financial year further fuelled the buying spree.

Market sources were of the view that in the wake of drastically falling gold prices, funds were diverting resources towards the secondary market. Opening on a strong footing, share prices climbed up on persistent buying by financial houses and speculators.

However, profit booking at the end of the session reduced the initial gains and in some cases the closings were lower than last levels.

CALCUTTA: Boom conditions persisted on the Calcutta Stock Exchange in the early part of the week. Trading was disrupted on the final day due to the bandh called by the Congress party - with share prices leaping towards new highs in some cases.

This was under the influence of sustained bull support as well as rumours of heavy purchases by foreign institutional investors. However, towards the mid-week, there was profit taking which checked the unabated uptrend witnessed earlier.

However, marketmen were of the view that this had served to correct the technical state of the market auguring well for a fresh advance.