Date:04/01/2006 URL: http://www.thehindubusinessline.com/2006/01/04/stories/2006010403540100.htm

Back 719 stocks hit upper circuit on BSE — Sensex closes above 9,500

Our Bureau

Mumbai , Jan. 3

TRADERS went berserk on Tuesday's trading with every fourth stock traded on the Bombay Stock Exchange (BSE) finding only buyers and no sellers.

The intensity of buying was so strong that 719 stocks hit the upper circuit at the bourse, out of the 2,603 stocks totally traded. Compared to this, just 35 stocks hit the lower circuit. In the upper circuit, there were buyers and no sellers, with the pattern being the reverse in the lower circuit. Under circuit-filter conditions, stock prices can move in a certain price band as decided by the stock exchanges.

The situation on the National Stock Exchange (NSE) was not as aggressive, with 118 stocks hitting the upper circuit out of the 879 stocks traded. Brokers said the day's trading at both the exchanges indicated a lot of interest in small-cap stocks. "This trend shows that there is a broad-based rally," said Mr Naresh Kothari, Head of Institutional Equities, Edelweiss Securities. He added that this rally was likely to continue due to improved corporate performance.

Most of the stocks that hit the upper circuit were outside BSE 500 index. There were just 11 stocks from BSE 500 that hit the upper circuit and not a single stock from the `A' group. Within the various groups of the BSE, 407 stocks were from T and TS group, where the circuit limit is 5 per cent. B-2 group, from which 164 stocks hit the upper circuit, also tracked this.

There was also buying in frontline stocks and this resulted in the BSE Sensex closing over 9500 for the first time. At close, the BSE Sensex rose149.23 points (1.59 per cent) to close at 9539.37 and NSE's S&P CNX Nifty closed 47.40 points (1.67 per cent) higher at 2883.35.

The advance-decline ratio was also in favour of bulls with just two stocks that declined for every 8 stocks that advanced on the BSE.

The across-the-board buying was primarily due to inflows from the FIIs, which had put in more than Rs 1,000 crore over the last two trading sessions. "FII inflows since beginning of the year shows lot of foreign investor interest in India and this has given much confidence to investors," said a dealer with a domestic broking firm.

Mr Kothari said that the valuation of Indian stocks at 18 times their earnings in 2007 was slightly on the higher side, but the outlook appeared good for the next 12-18 months.

The overall mood in the market was optimistic at close and traders expected a rise of another 200 points for the Sensex before a fall in stock prices happened. However, traders advised investors to stay off junk stocks.