Financial Daily from THE HINDU group of publications
Friday, Nov 21, 2003

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Columns - Ear to the ground

Market under creepy feeling

EXUBERANT investors have begun showing signs of worry and conspiracy theories are slowly replacing bravado as major indices continued to fall on Thursday. The grapevine has it that a big corporate group and three brokerage houses are holding large short positions in several stocks.

Several dealers say this cabal is short from the time Nifty was around 1600 and is attempting to depress the market even from the current levels. According to one source, the group had given large `sell' orders on Wednesday but withdrew them by late trade. The same group is reported to have sold heavily on Thursday also.

Meanwhile, buying by foreign institutional investors has also eased. Even though their net sales numbers are not too high, there is a feeling in the market that they may not buy aggressively for the rest of the year. Marketmen are talking of a couple of foreign funds selling because of redemption pressure at home. To top it all, additional margin requirements on several stocks imposed by both NSE and BSE has discouraged long positions.

Reliance's `flagging' fortune

THE stock of Reliance Industries fell on selling by retail investors as well as one US-based FII, a market source said.

News that Reliance has been out-bid for the purchase of Flag Telecom, a US-based wholesale telecom network transport and communication provider, was seen as a setback to its `infocom' venture.

Besides, some reports also suggested that the company's gas find in the Krishna-Godavari basin was overstated. The stock breached the psychological level of Rs 450 and closed at Rs 449.90 on the BSE. That was Rs 10.60 or 2.3 per cent lower than its previous close. Nearly 70 lakh shares were traded on the two exchanges.

Rolling on bonus hopes

THE stock of Chennai-based tyre-maker MRF has been attracting buyers on speculation that the company is planning a bonus issue of equity shares. The MRF counter, which is quite illiquid, has been witnessing a fair bit of buying. On Thursday, nearly 10,000 shares were traded on the NSE and the BSE together.

According to one dealer, the company is quite cash-rich and the book value of the share is far higher than the market price. The stock closed the day at Rs 1,805, almost flat compared to its previous close.

Dinesh Narayanan

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