New margins help speculators

There is no wonder that Sebi’s bid to provide additional safety and act as a deterrent to building up of excessive positions has come a cropper. The aim was to contain volatility in securities while providing an exit route for investors. Although theintra-day volatility has been contained, the gains in the past week of over 25 per cent show that the bulls have already built large positions coupled with high volumes. The software stocks have yet again shown exceptionally high volumes in the past week. The aim was to stop a one-way rise or fall in prices, but the lifting of the 25 per cent weekly price band has actually given the operators enough room to push prices to much higher levels. Under the previous regime, the scrip could not move beyond 25 per cent. But now the scrips have been allowed to swing to almost 47 per cent on a cumulative basis.

The bull recharge pushed up as many as 22 companies in group A and B1 beyond the 25 per cent weekly ceiling, which would not have been possible under the previous weekly price ceiling.

The top gainer was Mastek Ltd, which zoomed by over 46 per cent in the past 5 trading sessions to Rs 314.80. In the past five trading sessions, the scrip has risen from Rs 215.6 last Friday to Rs 231.3 on Monday and Rs 250.8on Tuesday, Rs 270.8, Rs 291.5 and Rs 314.8 on Wednesday, Thursday and Friday respectively. The scrip rose by 8 per cent for three consecutive sessions and could have even risen by 47 per cent during the week but for the 7.7 per cent and 7.8 per cent rise on Monday and Friday, respectively.

HCL Infosystem shot up by around 42 per cent to Rs 180 from the previous week’s closing of Rs 128. The top gainers were yet again the software scrips including Software Solutions, Pentafour Software, BFL Software, Silverline Industries and Satyam Computers. Among others, Dr Reddy’s Laboratories, Corporation Bank and BoB were the targets of bulls.