Financial Daily from THE HINDU group of publications
Wednesday, Dec 10, 2003
Financial Daily from THE HINDU group of publications Wednesday, Dec 10, 2003 |
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Stock Markets Markets - Stock Markets Record 488 stocks hit upper circuit on BSE — Sensex up 98 points, tops 5,200 Virendra Verma
Mumbai , Dec. 9 ON a day when BSE Sensex gained 98 points, the market players went on a rampage; every fourth stock traded on BSE got locked in the upper circuit. What was more interesting was the maximum number of stocks hitting upper circuit was from the newly created T-segment (trade-to-trade segment) that allows netting facility. A comparison of the circuit summary of Tuesday's trading shows that 488 stocks hit the upper circuit out of 2,150 stocks traded on the BSE, that is, every 4.4th stock hit the circuit. In comparison, just 50 stocks were locked in the lower circuit. A break-up of circuit summary shows that 112 stocks from B-1 group were locked in upper circuit, 167 from B-2, 166 from T segment and 43 from Z group. There was not a single stock from A group that were locked in upper circuit. On August 18 this year, 471 stocks were locked in the upper circuit. But the number in today's trading is highest in the history of stock market. Most brokers were surprised about so many stocks hitting the upper circuit. A dealer with a top broking firm said, "it is madness the way stock prices are moving." He said the stocks price of most of the smaller companies were just moving on rumours and there were hardly any fundamentals factors driving the stock price. While cautioning investors, another broker said, "The rise in stock price mainly in the T-segment is despite the stringent measure undertaken by SEBI and stock exchange.'' In September this year, over 500 stocks were moved to trade-to-trade segment following sharp rise in their price. Now the same stocks are moving up. Mr Arun Kejriwal of KRIS Research said, "Clearly, it is time to become cautious when a large number of B-2 and Z category and T-segment stocks are hitting upper circuit. Investors should be extremely cautious in trading in thinly traded scrips." However, most of the brokers said there was no concern in the market till the time only frontline stocks move. In Tuesday's trading BSE Sensex gained 97.80 points (1.91 per cent) to close at 5229.34 and on NSE S&P CNX Nifty closed at 1675.85, up 29.6 points (1.80 per cent). The rise in the main indices was mainly led by index heavy weights Reliance Industries and ITC. Brokers said overall the outlook of the market is good, but they cautioned if small and penny stocks keep moving in similar way than it is risky for the markets.
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