The Hindu Business Line : Bonus, stock split drive it

ON a day when most stocks fell, Divi's Laboratories was an exception. In fact, on Thursday the stock gained 6.68 per cent at Rs 1,733.75 on the BSE with volumes of 35,846 shares. On the NSE, it closed at Rs 1,733, up 5.68 per cent with volumes of 1.48 lakh shares.

The market talk attributes the price rise to the bonus issue and stock split. However, the details of this are yet to be known. Dealers said the bonus and stock split would increase liquidity in the stock.

Currently, there is not much liquidity in the stock and those holding on to the stock are not selling in anticipation of further rise in the price.

Techs feel the heat

TECHNOLOGY stocks were the worst affected on Thursday. The heavy selling in the counter was seen from the fall in the BSE IT index by 4.92 per cent, the steepest fall on Thursday among all the indices.

NSE's CNX IT index fell by 4.54 per cent. Some of the IT stocks that saw heavy selling included Polaris Software (down 8.83 per cent), Infosys Technologies (down 4.58 per cent), NIIT (down 5 per cent), Satyam Computers (down 6.66 per cent), Wipro (5 per cent).

Dealers said that IT stocks took the hit mainly due to selling by two leading FIIs that have large holdings in them. The selling was mainly on some concern over the outlook for some of these companies being not very encouraging in the next few quarters.

However, some dealers said there was not any major reason for the selling. The talk was that heavy selling from these FIIs could not be absorbed at higher levels and this resulted in fall in their price.

IPO rush leads to selling

THE margin traders turned heavy sellers on several mid-cap stocks on Thursday. Dealers said the selling was after the financiers started calling their funds from these traders. The talk is that these financiers see good opportunity in putting these funds in the IPO market that is going to see increased activity over the next few weeks.

The feeling among these financiers is that it is safe to finance IPOs in the current situation rather than traders in the secondary market.

Another talk is that several financiers are close to the investment bankers of these IPOs and on behest of them, the financiers would subscribe to the IPOs.

Virendra Verma

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