Rumours play havoc with markets again

Shares had risen earlier tracking overnight gains in the US Markets after the US Federal Reserve’s Open Market Committee voted to hike interest rates by 50 basis points, in line with expectations. Dealers said there was very little institutional activity on Wednesday.

Infotech stocks were among those that retreated in late trade. Infosys Technologies ended Rs 69 up at Rs 6,999, off Rs 7,449, NIIT Rs 16 higher at Rs 1,805, off Rs 1,919, Satyam Computer Services down Rs 74 at Rs 2,900, off Rs 3,287. Other losers included Hindalco down Rs 20 at Rs 740, Ranbaxy Laboratories Rs 14.9 at Rs 530, ITC down Rs 3.95 at Rs 617.05 and Zee Telefilms down Rs 20.75 at Rs 501.

There was significant buying in IT and Telecom company stocks in early trading but profit-taking at higher levels wiped off earlier gains completely. Analysts said many brokers were using the 12 per cent circuit filter mechanism to pull down the prices. “Brokers are pulling down some specific speculative shares by 12 per cent in the morning and then pull up by 12 per cent. The total gain will be 24 per cent,” said an analyst, adding, HFCL, Global Telesystem, Satyam Computers and Zee Telefilms stocks were showing huge volatile movements in the last one month.

On Wednesday, when the markets were showing a roller-coaster ride amidst rumour mongering, SEBI officials were ensconsed in a meeting with leading stock exchanges discussing the market safety. “It is strange that the manipulators acted on the same day when the Sebi was discussing various market measures,” said a fund maneger.

Sebi has told major stock exchanges to make improvements in the Stockwatch system so that alerts are prioritised and any anomalies in the market can be detected faster and dealt with promptly. “Rumours about companies are major scrip drivers,” said a senior Sebi official, adding that stock exchanges have been asked to be more systematic in scotching rumours before they can create any panic or reaction in the market.