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Thursday, August 10, 2000

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Technology shares maintain good show

Suresh Krishnamurthy

TECHNOLOGY sector shares extended their gains on Wednesday even as buying in non-technology shares remained lacklustre. The narrow indices - BSE Sensex and S&P CNX Nifty - registered marginal losses, quite unrepresentative of the rally in technology sect or shares. The BSE Sensex ended 0.18 points lower at 4,317.04. The S&P CNX Nifty ended at 1,344.95, down by 0.65 points, Wednesday being the first day of settlement at NSE.

Keeping with the lacklustre trend in the indices, the index heavyweight Infosys Technologies also recorded notably limited appreciation in value contrasted with the otherwise hectic buying activity in technology shares.

Satyam Computer, another index constituent, in contrast, registered modest gains. The Nifty Junior and S&P CNX 500 indices recorded appreciation in value of 3.1 per cent and 0.9 per cent, higher than that recorded by Sensex and Nifty.

The BL-250 index registered a gain of 0.7 per cent. The higher gains of these indices are mainly attributable to the higher weightage of technology shares in these indices.

The rally in technology shares has been generally attributed to buying by foreign funds. Yet, net foreign institutional investments were only of the order of $41.6 millions or close to Rs. 180 crores on Tuesday, which is a small proportion of the daily t rading volumes of NSE and BSE put together.

Even the gross purchases of FIIs at around Rs. 300 crores amounted to a small proportion of their daily trading volumes. Even more surprising is the fact that despite the sterling rise in stock prices of technology shares, the outstanding long positions at the Bombay Stock Exchange have declined for the second day in succession. At the end of Wednesday, they stood at Rs. 2,116.81 crores.

Trading activity remained exclusively centred around technology sector shares. Total trading volume was at Rs. 4,518.83 crores, lower than Tuesday's volume of Rs. 4,724.83 crores. Out of the total trading volume, Rs. 4,290.19 crores were accounted for by advancing shares, indicating the dominant role of technology shares in the day's trading. Advancing shares at 863 lead declines at 593.

Among the stocks to record gains during the day were DSQ Software and Shyam Telecom, both ending the day with 16 per cent gains.

In the case of Shyam Telecom, this is the second successive day of 16 per cent gain. Among stocks from other sectors, major gainers were Elbee Services, GE Shipping, ICI India, Punjab Tractors and Titan Industries.

The stocks of Elbee Services and GE Shipping continued to extend their recent impressive rise.

In the case of ICI India and Titan Industries, the day marked a reversal in stock price trends. Both these stocks, ruling at their 52-week lows after being hammered down recently, recorded gains.

The stock of ICI gained 8 per cent. Stocks of Asahi India and Electrolux Kelvinator, both of whom reported impressive financial performance for the quarter ended June 2000, also ended the day as gainers.

Among the stocks to lose value for the day were oil refining majors - BPCL and HPCL - which have reported declining profits.

The stocks of KSB Pumps, HLL, Clariant India, power companies - Tata Hydro and Andhra Valley, private sector banks - HDFC Bank and ICICI Bank also lost value.

The stocks of Tata Hydro and Andhra Valley, which are to be merged with Tata Power, extended their recent losses at the bourses. The stock of KSB Pumps plummeted to a new 52-week low. The stock of Sonata Software was also one of the day's losers having m issed out on the rally in software stocks. Other stocks to shed gains were Gujarat Gas, Tata Tea and Hero Honda.

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