Bulls continue dream run in volatile trading

With this, Sensex had gained 485 points in the last two days. However, several stocks which made huge gains on Monday lost ground. Hindustan Lever, GACL, BHEL, TELCO, ACC, Novartis and Grasim suffered a sharp setback due to profit-booking at higher levels, preventing the upward march of Sensex to a large extent. The profit-taking was also due to end-account profit-taking on the National Stock Exchange (NSE).

Though losers out numbered gainers, 23 scrips including eight infotech stocks hit the upper circuit filter after exhausting the daily limit. BPCL was the only scrip that was locked in the lower price band. Zee Telefilms continued to be the top traded scrip with the highest turnover of Rs 514.59 crore of the total volume of business of Rs 4444.14 crore, sharply up from yesterday’s turnover of Rs 2228.03 crore. Zee share spurted by Rs 94.40 to Rs 1274.60.

Satyam Computer was up by Rs 189.95 at Rs 2564.85, RIL by Rs 20.15 at Rs 272.50, Ranbaxy Lab by Rs 68.20 at Rs 1065, Pentafour Software by Rs 115.40 at Rs 1558.25, Castrol by Rs 26.35 at Rs 355.90, Hindalco by Rs 33 at Rs 900, Infosys Tech by 1232.70 at Rs 16910.20, L&T by 23.65 at 624, M&M by 36.25 at 489.80, MTNL by 16.65 at 225.05 and SBI by 17 at 259.70.

“There is every possibility that foreign funds will sell at these levels. They are known to take the market by surprise,” said Vetri Subramaniam, director at SSKI Securities. Information technology shares which were at the forefront of the market last year remained in the limelight in the last two days.

But analysts said the sustainability of the rally depended on the uptrend spreading to more than just the software sector. "For the best part of the last two months, it has been a one-horse race in the markets, but the breadth of the market has to increase for the rally to keep moving," said Subramaninam. Nilesh Jain, vice-president, institutional sales at Motilal Oswal Securities, said sentiment could deteriorate towards the middle of January as third quarter results in some sectors could be disappointing, but position-taking ahead of the federal budget may provide support later on.