After ACC, now it’s L&T turn

After remaning dull in the last few months, L&T scrip has again shot into limelight with increased volumes. The share which has touched a 52 week-high of Rs 630 on BSE and Rs 635 on NSE, there has been a continuous fall in the price since the beginning of this year mainly due to delay in the restructuring of the company various businesses as suggested by a global consultancy firm. In addition, the poor financial results also affected the company’s share price. The L&T stock has seen as much as 50 per cent of the company’s equity of about Rs 250 crore changing hands at the BSE and the NSE during the last ten trading sessions.

In fact, three scrips — ACC, L&T and MTNL — were hogging the limelight on the stock markets these days. In the case of MTNL, the daily combined volumes of both the exchanges constitutes of around eight per cent of company’s huge equity of 630 million shares. At BSE, the MTNL scrip has attracted trading volume of about 23.5 million shares in the last ten trading sessions for the month of November. However it’s price has remained almost static.

The runaway rise in ACC’s share price and volumes flummoxed many analysts last week. A total of 122 million shares constituting 69 per cent of ACC’s Rs 172 crore equity capital, changed hands on BSE and NSE put together during the same period while the stock price has shot up from Rs 120 on November 15 to Rs 143 on November 30.

“The battle between a frontline bull operator active in the early nineties, and his arch bear rival, is understood to be driving up these counters,” said an analyst. Leading market operators have followed the mutual funds and the FIIs in ditching the leading IT counters to take positions in some old economy stocks which offer attractive pricing.

The operators who are active in these counters adopt a very simple modus operandi: create as large volume as possible through their network of brokers in these counters to attract punters and day traders and as soon as they make an entry, sell them the shares gathered at low prices and leave the counter to pick another scrip, broking sources explained.

“Of course, operators — whether big or small — have the right to buy or sell in the stock market. But the activity in some old economy stocks like L&T, MTNL, M&M and ACC have raised doubts about the continuing manipulation in the market-place,” said BSE dealer PL Ramesh.