The recovery in banking stocks left the market participants confused. However, in the case of SBI, technical analysts strongly propagate the theory that the stock has `double bottomed' at Rs 203-levels. True to this theory, the stock has rebounced from Rs 203/204 level to close at Rs 221.55 where the stock was locked for the rest of the session on the local bourses. According to market sources, Morgan Broking has once again played an influential role in propping up the stock price on the bourses. Besides Morgan, the market was agog with rumours that local brokerage houses like SSKI and DSP Merill Lynch have also received huge buy orders from their overseas clients. This may push up the FII limit to 16 per cent and the stock would be quoted at Rs 250-270 level. However, the FII deals could not be confirmed. Some analysts cite the April theory, for the surge in the stock price.Mixed trend from FIIs
The single large correction of 70 points on the BSE, according to market sources, was largelycontributed by FIIs. The Sebi figures on institutional transactions also reveal the same. On Thursday, FIIs were net sellers to the tune of Rs 55 crore. However, on Friday, FIIs were rumoured to have bought at the counters of Reckitt & Colmann, Digital and Onward Technologies. Interestingly, considering the pending buy orders at the counter of Onward, market was agog with rumours that FIIs have re-rated the stock and is likely to be traded at Rs 400-level. Onward closed at Rs 280.80 on the NSE on Friday.
McDowell heads deal list
Among negotiated deals, huge deals were reported at the counters of McDowell, Bayer India, BFL Software, Reliance Petroleum, Wyeth Leaderle and Zee Telefilms. While Mc Dowell has suddenly gained favour among market participants as domestic mutual funds have also taken an exposure at this sector, the huge cross deal reported by DSP Merrill Lynch further provided some more strength to the rumour that the stock will soon touch a new high of Rs 100. DSP reported a single crossdeal of 3.91 lakh shares on the BSE at Rs 54.30 on Friday. The stock was locked at the upper limit of Rs 54.20. Credit Lyonnais, Jardine Fleming and DSP Merill Lynch reported huge cross deals on the BSE Friday. Capital International is believed to have placed a buy order of around 10 lakh SBI shares and domestically.
The Canbak offshore fund is rumoured to have sold HCL Infosystems and bought Silverline and HPCL. There was an order to purchase 5 lakh Ranbaxy by an US-based FII. Morgan Stanley is rumoured to be buying L&T and Mahindra & Mahindra.
GMDC is a good pick
According to fund managers, Gujarat Mineral Development Corporation is a great pick at current market price of Rs 55. It trades at a p/e multiple of 2 times and reported a net profit of Rs 69 crore last year on an equity of Rs 31.8 crore. The company is expected to report a net profit of around Rs 75-80 crore this year.
MRF's muscle
The stock, which has been in no-delivery, has been going up for the past three days and hasrisen from Rs 1,800 to Rs 2,400 on Friday. Market expects that a liberal bonus of 5:1 is shortly expected from the company. ``This is one company which has been doing well despite recession in both the replacement market and the OEM segment. The sales of this company are very strong and in the event of a turnaround in the automobile sector this would be one company which benefits the most,'' said a BSE broker.
-- Nalini D'Souza and Parul Monga
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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