Mumbai, June 2: Volumes slumped by 30 per cent to Rs 1094 crore on the Bombay Stock Exchange amidst lacklustre trade with institutions largely adopting a `wait and watch' strategy. The bourses continued to be a function of the ongoing battle at Kargil for the fifth consecutive trading session. The Sensex opened marginally higher in the morning session at 3921 but prices suffered a moderate setback on news of escalating conflict. However, the Prime Minister's statement that Indian forces had been successful in pushing back the infiltrators perked up the sentiment. The Sensex, after moving in the range of 3870.16 and 3943.14, closed the day at 3935.82, netting a gain of 23.02 points against Tuesday's close of 3912.80 points. According to analysts, the renewed buying interest at the counters of Reliance, MTNL and SBI provided enough support for the index at the crucial level of 3880.The trading was marked by a sharp fall in volumes from Tuesday's level of Rs 1,567 crore to Rs 1,094 crore. ``The volumes werevery low which shows that participants continue to adopt a wait and watch policy with concentrated buying at few counters. However, the undertone continues to be bullish,'' said a BSE broker. To illustrate the bullish sentiment in the market, brokers said that the ratio of long to short positions was currently 3:1 while it was 10:1 during the 1992-bull run.
Market sources said that FIIs made heavy purchases at counters of Reliance Industries and MTNL. ``RIL and MTNL were the frontrunners today on a day marked with low volumes,'' said a dealer with a domestic broking house. While Reliance moved up by Rs 6.60 to Rs 173, MTNL gained Rs 12 to end the day at Rs 189 after touching an intra-day high of Rs 190.83. The counter clocked a volume of 33.49 lakh shares on the BSE.
With the sentiment bullish, brokers feel the markets are waiting for a trigger to rally. Broking circles believe that with Reliance being the barometer of underlying current, an improvement in the scrip's price has signalled a recovery in theindices.
The second rung infotech stocks found support in the market after a considerable period. The renewed buying is attributed to FIIs and fund managers scouting for value stocks in the IT sector coupled with speculative interest. While Citicorp, Ramco, CMC and Maars Software hit the upper end of the circuit filter, Silverline rose by 7.6 per cent to Rs 213.15.
Brokers pointed out the divergent trend in buying by FIIs and domestic institutions. While FIIs bought cyclical stocks, domestic institutions led by UTI were rumoured to have bought in defensive stocks like information technology. ``The market is fairly quite and the uncertainty will last for a couple of days. The FIIs are back in action,'' said Arun Kejriwal, chief dealer, Woodstcok Securities.
The Morgan Stanley counter continued its rise and closed at Rs 8.65 against Tuesday's close of Rs 8.20. The counter saw a negotiated deal of 5.36 lakh units.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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