Grasim hit the upper circuit at Rs 137.55 and saw a huge cross-deal of 1.50 lakh shares conducted by HSBC Broking. Others like ONGC at Rs 134.45 and VSNL at Rs 813 continued to hit the upper limit of the circuit breaker for the second consecutive day. Market players find it tough to understand the optimism of FIIs and say that the acquisition of shares is also `by default' on account of the increase in FII allocations for the Asian markets. They termed India as the `default gainer'. "Political uncertainty does not seem to disturb global investors with the sturdy rupee," said an NSE broker.In the last four sessions, the Sensex has gone up by around 450 points and fund managers warn that as the markets rise steeply, they also fall steeply, and that the V-facor should always be kept in mind with the market.

Signsof an upturn
Brokers and fund managers, quoting from the NCAER study, on Thursday said that the demand in the economy should pick up, keeping markets strong. According to the study, industrial growth, which continued to see deceleration in the last fiscal, now shows signs of an upturn. According to the survey, recent months have seen an increase in the demand for cash by the public. Simultaneously, there is greater demand for commercial vehicles and their production has witnessed an acceleration. Business confidence also improved, but may now be affected by the political uncertainty. The study indicates that the industry is likely to grow at 5.7 per cent during the current financial year if the monsoon is normal and agricultural sector continues to do well.

A good arbitrage opportunity
According to some fund managers, though there is no doubt about FIIs pumping money into the market, a surge in some stocks which have hit the upper circuit indicates the huge arbitrage opportunity in themarket that is available to the FIIs. "Software, FMCG and pharma stocks have all been sidelined, compared to a huge surge in SBI, MTNL, L&T, Indian Hotels, Telco, Grasim and Hindalco, which also offer great arbitrage opportunity to FIIs," said a fund manager.

Bank stocks: Good picks
SBI touched the upper circuit on Thursday as well at Rs 1,196.45. Apart from the fact that a US-based fund has placed a huge order to buy SBI, which is still being executed, fund managers feel that this stock is a good pick at current prices. Fund managers also point out that, in the south-east Asian countries, the top stocks currently are the banking stocks and, so, a bit of that trend is rubbing off on India as well. "Banking stocks had been hammered to low levels and thus valuations at current levels are very attractive. Otherwise on the deposits and advances front, nothing much has changed and the balance sheets of banks have also not shown much changes and improvement," said a fund manager.

Infosys gainsfurther ground
Infosys zoomed to touch the upper limit of the circuit breaker at Rs 3,167.50 with volumes of 12.07 lakh shares. "Compared to the balance of other big software players, the balance sheet of Infosys shows a cash position of Rs 91 crore through the ADR of Rs 300 crore. Also, the debt of Infosys is lower compared to others and investors are comfortable with this," said a BSE broker.

Hindalco: Going strong
Hindalco declared its results on Thursday, which saw the scrip touch the upper circuit at Rs 608 before falling to close at Rs 586. Hindalco's 1998-99 aluminum production was up 20.3 per cent. The company plans to expand capacity and step-up production of value-added goods to consolidate its position in the local market. The company also registered a 14 per cent increase in net income and 20 per cent increase in sales. With a rise in global aluminium prices, the company is in a strong position, feel fund managers.

FII grapevine
According to grapevine, Canbankoffshore fund is rumoured to have picked up 50,000 shares of ACC and 2 lakh shares of BoB. The FII, Prudential, is rumoured to have bought 5 lakh shares each of Reliance and L&T. ALlianze Capital continues to buy in Digital Equipment. FIIs were also active at Raymond Woollen, ITC, Infosys, SBI, and Hindalco. DB Mauritius, an FII, is rumoured to have bought 50,000 shares of NIIT, while Morgan Stanley is rumoured to be active in Telco and SBI.