Hectic buying on Lyons Range

By A Special Correspondent

KOLKATA, APRIL 22. The Calcutta Stock Exchange along with other major bourses staged a spectacular rally in share prices last week in hectic buying activity, the bulk which was credited to foreign institutional investors whose interest was rather pronounced in the hitherto depressed technology shares. Interest was also noted for the cyclical scrips which too rallied providing for widespread gains as the week closed on a markedly improved note. Thus the bourses in the country have undergone a dramatic change. This was triggered by a smart recovery in the techno-laced Nasdaq following sharp gains scored by technology shares in the U. S. market. As a result of this major rally in the Calcutta market, the CSE's 40-share index jumped to close at 1905.46 points from the previous week's close of 1764.43 points.

The market moved into an excellent form after starting on a relatively quite note reflecting largely revival of buying, especially in the technology counters, from leading buyers like FIIs. Occasional profit booking coming forth from domestic institutions was effectively absorbed with the result that share prices at finish showed substantial onbalance gains which were somewhat pronounced in select counters. The new buying from FIIs was simultaneously backed by sustained bear covering induced by the action of the market regulator SEBI by barring three brokers who were, as a result, compelled to cover their short sales instantly. They were barred from fresh trading until further orders on grounds of their involvement in price manipulations. This turn in effect accelerated the upward trend in share values as the week progressed.

Besides reports of a spurt in the technology shares in U. S market, the sentiment of the market here was also assisted to a considerable extent by performance reports of some software companies and expectations that other companies in this sector also will come out with encouraging performance reports. Among the major gainers were the shares which were favourites of the infamous bull operator, Ketan Parekh and had sunk to distressingly low levels in the course of the recent bear hug of the market. The old economy counters moved into a fine form lead by Reliance Industries which experienced hectic buying. Heavy commercial vehicles manufacturers like Ashok Leyland and Telco also witnessed some buying interest spurred by reports of sizeable orders from the Delhi Transport Corporation, while BHEL was in demand supported by talk of substantial orders from a public sector undertaking.

The broadened buying in the specified list not only served to push prices strongly upwards but also to enlarge the business volume substantially. The sharp upturn in the specified group in turn aided the non-specified list shares helping several counters to finish the week in the plus territory. The lively activity as well as price rise reported around mid-week from the Asian markets also contributed to some extent to the current buoyant mood of the bourses in the country. The positive trend is expected to persist in view of the fact that buying on account of FIIs is fairly strong and operators are optimistic that they will continue to be net buyers in the market.

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