The Hindu Business Line : Over 400 stocks touch all-time high on BSE

This is almost 20 per cent of the stocks traded on the BSE regularly. What is interesting is that more than 300 stocks touched their all-time high levels after the last Lok Sabha elections.

According to BSE data, 419 stocks touched their all-time high levels between January 1 and October 7, 2004. The historical data is from 1994 onwards.

Break-up of stocks based on various group categorised by the BSE shows that most of them are from B-1, B-2 and Z group. Even though there are stocks from A group, their numbers are not high.

Brokers and analysts said there were varied reasons for this trend. Some attribute it to turnaround in the different sectors of the economy, which has led to a rise in the stock price of companies, while others allege increased manipulation in smaller companies' stocks.

While corporate debt restructuring led to turnaround in several companies, lower interest cost and reduction in overhead costs have made them more efficient.

Renewed investor interest is also seen in sectors such as steel, textiles and chemicals, which have seen sharp upswing in the recent past.

Mr Sandeep Shenoy, strategist at stock broking firm Pioneer Intermediaries, said, "In the early part of this year bigger companies' stock touched their all-time highs and in the second half of the year it was the turn of the second-rung companies. This has happened due to the improved efficiency in most of these companies."

He said there has been turnaround in second-rung companies due to more efficient use of working capital and increased productivity. "There is also rise in size and scale of operations which is now being discounted by stock market."

Mr Nikhil Thacker, Assistant Vice-President (Research), Asit C. Mehta Investment Intermediaries, said there is broad-base rally in the market with retail participation.

"Investors, especially retail, are buying into small cap stocks on expectation of better results."

But some market players cautioned that several companies' stocks have moved up sharply without any major change in their fundamentals.

"When this kind of situation arises it means that stock market is at its peak levels," said a dealer with a domestic broking firm.

Mr Thacker cautioned that investors should not put their money in penny stock, which have weak fundamentals.

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