COLOR Chips, a company into animation business, rose sharply on Tuesday when there was selling in most of the counters. The stock rose 17.91 per cent at Rs 23.70 on the BSE with volumes of 16.75 lakh shares; on the NSE, it closed at Rs 23.85, up 20 per cent, with volumes of 12 lakh shares.

Dealers said the rise in the stock price is due to the good prospects for the company's business.

The spurt in the stock price of Crest Animation is also seen as a factor for the rise. Dealers said the Color Chips stock has not moved compared to Crest Animation and the stock looks under-valued.

The rights issue at Rs 10 by the company is also seen as positive by investors as they said that the company could have easily asked for a premium from the existing shareholders.

However, the investors who buy the shares now will not be eligible for the rights.

Bear lobby in control

WITH large scale FII buying not coming to the market, the bear lobby has become active in the last couple of days. Tuesday's sharp fall in the stock prices, especially index stocks, is due to selling by this lobby.

Dealers said even in the past this lobby had tried to sell shares and index futures to depress the prices, but failed due to large scale FIIs' buying.

Another reason for the fall in stock prices on Tuesday was that most of the traders in the derivatives market squared off their position instead of carrying over to next month. This was due to the fact that most of the traders are not comfortable with the stock valuations at the current level.

Virendra Verma

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