The UTI's decision to aggressively purchase second line stocks over the past month seems to have been the undoing of many bear players in the market.
UTI's decision seems to have been prompted by the fact that FII sales have negated its efforts to stabilise the market by buying key index stocks like Reliance, SBI and ITC. With GDRs of these stocks being quoted at a discount, FIIs have been regular sellers at the counter.
While the Sensex merely moved up 28 points, players said that there was greater depth in the market yesterday, with buying interest spread across the board.
UTI's decision to concentrate on side counters seems to have led to a lot of players, who went short at these counters expecting a fall in prices, being caught napping. With no follow-up selling at these counters, bears are now having to cover up their positions at a higher price.
UTI is reported to have purchased around 1 lakh shares of Carrier Aircon, Exide and nearly 30,000 shares of the Infosys Technologies and Phillips scrips.
On the selling side, it is reported to have sold around 1.5 lakh shares of Cochin Refineries and 1 lakh shares of the Century Textiles scrip. It is also reported to be booking profits at the Bata, Glaxo and ACC counters.
The HPCL scrip is at last witnessing some renewed buying interest after plunging to new depths for the past month. A London-based fund is reported to have picked up close to 1 lakh shares of the HPCL scrip on Friday. The same fund is also reported to have picked up around 2.5 lakh shares of ICICI, which has been figuring on the sell list of, both, FIs and FIIs of late.
However, HPCL's peer BPCL still does not seem to be getting any respite from selling pressure. A Canadian fund is reported to have sold around 55,000 shares of the scrip on Friday.
A US-based value investor fund is reported to be a buyer at the GE Shipping counter. On Friday, it is reported to have bought 1 lakh shares of the scrip. A UK-based fund seems to be washing its hands off the HDFC Bank scrip having sold close to 4 lakh shares of the same last week. Of this, around 75,000 shares were sold on Friday.
A leading Singapore-based fund on a 'Quit India' movement is reported to have dumped around 80,000 shares of EIH on Friday.
A leading domestic fund is reported to have picked up around 25,000 shares of the Punjab Tractors scrip on Friday.
Wrong number, operators
If you thought that operators were the players who made big money through advance market information, think again. They can also lose big money through miscalculations. A few operators, both bulls and bears, had built up large positions at the Procter & Gamble counter in anticipation of the company declaring a net profit of at least Rs 50-52 crore.
The move backfired with the company's net profit increasing by 32 per cent to Rs 43 crore. To make matters even worse, the managing director has stated that profitability margins would continue to be under pressure because of reduced consumer spending and increased competition. Now the operators are believed to be stuck with long positions at the counter, which is currently in its no-delivery period.
The operators cannot sell indiscriminately as this would bring about a sharp fall in prices. The only alternative would be to pull up the prices before exiting from the counter.
However, fund managers do not seem to be comfortable holding a stock when it is known that the company's profitability would be under pressure. Already the UTI has sold around 10,000 shares of P&G on Friday. The P&G scrip was down by nearly Rs 25 even though rest of the side counters posted handsome gains. A keen tussle between the operators and fund managers at the counter is on the cards.
