On second thoughts, there is a fair reason for fund managers to buy into technology stocks at current valuations. For one, most of the buying has taken place in frontline stocks which have been reduced to compelling if not ridiculous valuations. Also, most of the buying has taken place in fairly liquid counters. It is a different matter that overall liquidity in the market has come down sharply following the ban on naked short sales.

Still, in an atmosphere of uncertainty when everybody is looking for exits, few fund managers would want to indulge in acts of NAV propping, unless he is flush with funds. That again is not the case as most AMC are facing outflows more than inflows t this point in time. So one could assume that most of the buying is based on fundamentals more than anything. But whether the rally will sustain is a topic of debate.

Savvy moves?
Amidst the panic at the Visual Soft counter, the Savvy Fund Manager is reported to have accumulated a small chunk of shares. Quite surprising that illiquid counters have never been Savvy's favourites. Also, a very brave move considering that the stock is not finding any takers among the fund managers' community following the profit warning issued by the company. It is very likely that Savvy has taken a calculated risk at the counter by getting his timing fairly right. More than the fundamentals of the stock, Savvy seems to be pinning his hopes on a technical rebound, considering the sustained downtrend over the last few months.

Deals on wheels
On Wednesday, the Merry Lunch brokerage is reported to have mopped up close to 60,000 odd shares of tobacco major ITC. The stock did find favour among some of the other institutional players too though the identity is yet to be confirmed.

Among frontline software stocks, Satyam seems to the hot favourite for the week. Around 1.7 million shares were reported to have been picked up on Tuesday between Merry Lunch, Why Care, Co-Tech, Say-Yes-If-Be, Uncle Jam and the Swiss brokerage. Around 1.5 lakh shares of Infosys Technologies were picked up on Tuesday with Why Care and Merry Lunch accounting for about 75,000 shares each.

Among other scrips which figure on the institutional buy list include Hughes Software and HCL Technologies. Among second-tier technology stocks, HFCL still continues to be a favourite with Uncle Jam. The brokerage is reported to have picked up close to 3 lakh shares on Tuesday.

The complete stocks turns
The Raymond scrip managed to make a strong comeback on Wednesday, in a session that was largely dominated by technology stocks. With a buy back programme in progress at the counter, such fluctuations are not uncommon. With prices quoting at nearly 40 per cent discount to the buy back price of Rs 140, the management could not have gotten a better opportunity to mop up shares. This apart, institutional players who have booked profits by partaking in the buy back scheme through the open market route could also be covering back their positions. Among local institutional players, the Sue Rich AMC is one of the staunchest followers of the stock.

Santosh Nairsantoshnair@myiris.com