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Our Bureau

Mumbai, Oct. 3 The Sensex ended on Wednesday at its tenth straight consecutive record high, but its movement was so choppy that it left many a seasoned observer speechless.

“It is very difficult to ascribe specific reasons for this,” said Mr Raamdeo Agrawal, Head of Motilal Oswal Financial Services. “Trading was very concentrated, and in a few stocks,” he said.

Indeed the rally appeared to have narrowed considerably on Wednesday. Only 39 per cent of the BSE stocks advanced, while almost 60 per cent declined.

“One really gets wary about whatever is happening; buying is happening only on selective counters,” said the head of institutional sales with a large securities firm, who did not want to be named.

Early in the day, the market took its cue from Tuesday’s rally in the global markets. The Sensex opened at 17,467, hitting its life-time high of 17,953, gaining by around 500 points.

It then plunged by almost as much, as selling pressure in China and the Hang Seng index’s fall set off a rally reversal.

The Sensex touched the day’s low of 17,288.41 to regain lost ground as it tailed off to its close, gaining 518.42 points (or 2.99 per cent) over Monday’s close.

The subsequent rise in the markets was in part due to Reliance Energy filing its draft prospectus with SEBI for its IPO for Reliance Power, said brokers.

The expectation of a Rs 10,000-crore IPO pulled up many of the ADAG group stocks as well. REL was Wednesday’s biggest Sensex gainer, rising by 7.48 per cent on the BSE.

Realty and IT stocks rose - the first on news of DLF winning a mega project in Bangalore, the second on expectations of good half yearly results from Infosys and the other majors. The BSE Realty Index gained 6.46 per cent, and BSE IT 4.02 per cent.

But observers said they were still stunned by the volatility. “When the market participation increases, so does volatility. And retail participation has indeed increased in the past few days,” said Mr Lalit Thakkar, Director Research, Angel Broking.

FII funds continued to flow in unabated. According to NSE data, they were net buyers for Rs 2,662 crore on Wednesday. Domestic institutions were net sellers for Rs 222 crore, and the retail segment net sellers for Rs 585 crore.

There was delivery based buying by institutions, and hedge funds were clearly cautious in short selling, said brokers.

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