Momentum stocks get punter push

After a short but turbulent phase, some of the top punters on Dalal Street are back, restarting their operations in the so-called 'momentum stocks' that are now available at almost 70 per cent discounts to their recent peaks.

The high operator action, say market analysts, could be gauged from the fact that the likes of Essar Oil, IFCI, Adlabs, Reliance Natural Resources, Igarashi Motors and IDBI moved up in the range of 15 to 45 per cent last week.

The shares of IFCI gained over 17 per cent in the past four trading sessions. The stock was hammered from Rs 120 after private players who had bid for the company refused to pay the market price terming it as ridiculously high.

Essar Oil has picked up momentum after a sharp decline in January, moving up by 44 per cent in merely four trading sessions.

The counter of IFCI on Monday clocked volumes of over 85 lakh shares against the two week average volume of 1.16 crore shares on the Bombay Stock Exchange (BSE). Over two crore shares changed hands on the National Stock Exchange (NSE).

Over 7.15 lakh shares of Essar Oil were traded on the Bombay Stock Exchange against the two week average volume of over 59 lakh shares and over 1.28 crore shares of the company were traded on NSE on Monday.

There is significant price rise on some of the counters even while the key benchmark indices are rising on small volumes due to short covering and weak investor participation.

According to stock brokers, some shares saw a sharp daily rise of 5 to 20 per cent despite the absence of any major announcements by the companies. This clearly proves that operators are indulging in 'price rigging.'

A host of B1 and B2 group stocks are moving up swiftly as well.

"It is a general practice among punters to place these stocks as margins while purchasing future contracts. After the decline in stock prices, the margins too got eroded. However, once they ensure that the prices of these stocks go up, they will be in a better position to take higher leverage in the F&O segment," explained a dealer in a domestic brokerage house.