Promoters Return To Dalal St

After watching the share prices of their companies dip to alarming levels for reasons not based on fundamentals, promoters seem to have had enough. Promoters of two leading corporates were reported to have been active in the market yesterday to check the slide in their stocks.

Many fundamentally sound scrips in the specified group have been battered beyond recognition, courtesy the incessant sales from foreign funds wanting to reduce their exposure to Indian markets.

Leading players feel that if the situation continues, many more promoters will have no other option but to "step in" to halt the erosion in their scrips.

 

Yesterday, a leading finance company is reported to have purchased around 15 lakh shares of its group company. This brought about a sharp turnaround in the scrip price boosting the overall sentiment.

Yesterday's rally is believed to have been more of a technical rally assisted by rampant speculative purchases. Rampaging bulls effortlessly gobbled up FII sales to the tune of nearly Rs 31 crore on both the exchanges put together.

Short-sellers at the Reliance counter were in for a rude shock yesterday as renewed buying interest emerged out of nowhere. The scrip, which had been quoting at around Rs 110 levels till noon , flared up on frenzied buying - partly institutional and largely speculative.

A leading US-based value investor fund is reported to be buying at the Reliance counter. On Wednesday, it is reported to have picked up two lakh shares. The same fund is reported to have sold around three lakh shares of Gujarat Ambuja Cements Ltd (GACL).

GACL witnessed hectic buying interest yesterday though it could not be confirmed whether the interest was institutional or speculative in nature.

A Hong Kong-based brokerage is reported to have sold 5.5 lakh shares of the Reliance scrip on Wednesday on behalf of a fund closely associated with a leading corporate.

A leading European brokerage is reported to have made aggressive purchases at the Satyam Computer scrip following clearance from the RBI. The brokerage is reported to have exhausted its order yesterday.

UTI is reported to be aggressively buying into HDFC Bank, having picked up a little over five lakh shares this week.

Among pharma stocks, UTI is reported to have picked up around one lakh shares of Reckitt&Coleman, 75,000 shares of Wockhardt, 50,000 shares of Dabur and 35,000 shares of German Remedies on Wednesday.

On the side

In the B1 group, the scrips of Amara Raja Batteries and Hindustan Inks and Resins have been witnessing regular buying interest for the past 4-5 trading sessions. Prices at both the counters have been edging up steadily on volumes indicating an accumulation of shares. Both the scrips touched new 52-week high during intra day trading. While a domestic institution is reported to be a buyer at the Hindustan Inks and Resins counter, the identity of the buyer at the Amara Raja counter could not be confirmed. In the last two trading sessions on the NSE, nearly three lakh shares have changed hands with the price moving up by Rs 20 during the period.

Hindustan Inks is in the field of manufacturing liquid inks, resins, adhesives and enamels with a major part of the turnover coming from the printing ink segment. According to analysts, the company also exports lamination adhesives to the Middle East and north Africa, and has expanded its operations in Europe. The scrip has an EPS of Rs 38 and is quoting at a P/E multiple of 4.7.

Flashback

Accumulation is also being witnessed at the Crest Communication counter which is currently quoted at Rs 35 levels. Players attributed the renewed activity at the counter to talks of a foreign player picking up stake in the company. The scrip had been in the limelight a couple of months back due to the same reason.