The Hindu Business Line : Numbers fail to enthuse Tisco, Tata Motors

IN the midst of crash in the stock market, the market seems to be ignoring the good results. This was seen on Thursday in market's most-sought stocks such as Tata Motors and Tata Iron and Steel Company (Tisco).

Both the companies announced excellent results, much better than expectations, but the stock prices of these companies fell sharply.

Dealers said there is nothing wrong with the companies' results, but there were large positions built in these counters over the last few months. Out of these positions, the amount of purchases was mainly on borrowed funds or share bought on margins.

But in the last three days, there has been sharp fall in these companies and this has resulted in financiers selling the shares of these two companies as their clients failed to bring in the additional margins.

If the market talk is to be believed, these traders have lost large sums of money in these counters. The major loss has been due to the huge positions built in the derivatives segment for these two stocks. On Thursday, Tisco was down by 5.23 per cent at Rs 395.70 on the BSE and Tata Motors was down by 8.01 per cent at Rs 422.30.

Hopeful future

AT a time when the mood in the market has turned bearish, there is some silver lining for some market players. This silver lining is that the Nifty January Futures are trading at a premium of around 18 points or one per cent over the spot price.

On Thursday, the Nifty Futures closed at 1,787 compared to the underlying value of 1,770.50. This contract expires on next Thursday.

Dealers said normally premium for such a short period is seen when the markets are likely to move up. The talk is that several players have bought the January Futures on Thursday, expecting market to bounce back next week and this premium is also due to this. What is more interesting is that the markets are closed on Monday, and this has left just four trading sessions for the market players to make money.

Virendra Verma

More Stories on : Stock Markets | Ear to the ground

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