Recovery on Lyons Range

By A Special Correspondent

CALCUTTA, JULY 1. After starting on a depressing note because of continued unwinding of their positions by operators, share prices on the Calcutta Stock Exchange last week staged a dramatic rise on the final day reflecting revival of buying in a host of counters which gave a boost to the sentiment.

Incidentally, the week marks the end of the century-old badla trading system under a directive issued by the Securities and Exchange Board of India.

The regulatory body took the step in May last in the wake of the payment crisis that rocked the country's bourses during March- April throwing the SEs into total disarray.

The SEBI directive also made in obligatory on the part of the Stock Exchanges in the country to bring a larger number of shares into the rolling settlement system which at present covers a limited number.

Ever since the crisis surfaced in the bourses during March-April the trading volumes dropped appreciably and the same shrunk further sharply during the week under review due to absence of worthwhile buying from major sources including institutional buyers - both foreign and domestic. The FIIs are, however, reported to have evinced interest to absorb fresh lots of selected shares, especially on the final day which led to a smart recovery in them.

The recovery was reinforced by offtake on account of some of the domestic institutions whose late buying was to shore up their portfolios for the half yearly reports. One institution whose annual accounts are closing in June also is reported to have picked up shares. The late buying helped the all important sensex to close the week at 3456.78 points as against the week's lowest of 3288 and the previous week's close of 3381.76 points. The CSE's 40-share index closed at 1798.30 points against previous week's 1802.53 points.

The opening day was extremely bearish and under heavy pressure leading shares eroded sharply. Part of the pressure was ascribed to nervousness generated by reports that the Unit Trust of India had sought a loan to meet its obligations for redemption of its flagship scheme - the U.S. 1964. Subsequently after the mid-week with buyers emerging in the market, though selectively, prices retrieved some ground. The recovery gained added strength of Friday when a host of shares rallied.

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