Telco, the country's biggest truck maker, was in the limelight in an otherwise lackluster market today. Telco's share price hit the upper 10 per cent circuit amid huge volumes -- both in the cash market and the derivatives segment. In fact, it was the only counter to hit the 10 per cent upper circuit today.
What was important in today's trading was that the shares were traded at a substantial premium in the cash market and were quoted at a discount in the futures market.
On the Bombay Stock Exchange (BSE), the scrip recovered from a low of Rs 113.50 to hit 10 per cent upper circuit at Rs 127.60, before settling at Rs 126, up 8.62 per cent over its previous close. On the NSE, the share price closed at Rs 127.55 (Rs 115.95). In the futures market, the Telco scrip January series expiring on January 31 closed at Rs 122.70. The volume in the cash market was 29.99 lakh shares and in futures the volume was 28.87 lakh shares on the NSE. Even February series futures also attracted volume of 3.89 lakh shares.
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Analysts attribute the rise in volumes and price to aggressive fund-based buying over the last few sessions on rumours that the company plans to launch the Sedan version of its small passenger car, Indica.
Dealers said large deliveries were lifted by FIIs, mainly US-based US funds. Large scale buying in Telco follows encouraging news of an increase in volume sales reported by other auto companies. Another reason for sharp difference in closing prices in cash and futures market appears to be short covering. Anticipating encouraging results, traders also preferred covering their short positions, dealers said.