857 stocks hit upper circuit filter on BSE

K.S. Badri Narayanan

Chennai, Dec. 14 Traders went berserk on small-cap stocks on Friday sending every third stock on the Bombay Stock Exchange to upper circuits.

Upward march

The intensity of buying was so strong that 857 stocks hit the upper circuit at the bourse, out of 2,940 stocks traded. However, just 52 stocks hit the lower circuit. In the upper circuit, there were only buyers and no sellers, with the pattern being just the opposite in the lower circuit. Under circuit-filter conditions, stock prices can move in a certain price band as decided by the stock exchanges.

The situation on the National Stock Exchange (NSE) was no different, as 177 stocks hit upper circuit while 20 counters hit downward freeze out of the 1,191 stocks traded.

Brokers said the day’s trading at both the exchanges indicated a lot of interest in small-cap stocks. According to market participants, though the benchmarks — the BSE Sensex and the NSE’s S&P CNX Nifty — have been witnessing some pressure at higher levels, the story was different for small- and mid-cap indices, as they continued their upward march relentlessly for the last few days.

Even on Friday, the BSE Small-cap index jumped 1.57 per cent and the mid-cap index by 1.02 per cent while the BSE Sensex slipped 0.37 per cent and the NSE Nifty declined 0.17 per cent. Both the BSE small-cap and the mid-cap indices have registered another new peak during intra-day.

B2-group action

Most of the stocks that hit the upper circuit were outside BSE 500 index. There were just eight stocks from BSE 500 that hit the upper circuit while three stocks belonged to ‘A’ group. Among the various groups on the BSE, 419 stocks were from B2-group, 190 from T-group and 70 from B1-group.

The advance-decline ratio was also in favour of bulls as 70 per cent of total traded stocks gained in value against 28 per cent that de clined on the BSE.

According to market participants, the circuit filter tally could be higher if one considers stocks that are also trading in futures & option segment. Circuit filter does not apply to stocks that are trading in F&O segment, according to exchange rules. Mr Arun Kejriwal of KRIS Securities, said: “Mid- and small-cap stocks did not participate in the rally when the Sensex moved from 15,000 to 20,000.

With foreign institutional investors going on holiday, action has been shifted to this sector. Retail investors are also happy with this rally as they are active in this segment.”

However, traders advised investors to stay off from junk stocks. The rally is likely to continue in mid and small-cap space for some more time, Mr Kejriwal added.

Among the stocks that hit upper circuit filter include Rashtriya Chemicals, Gillette India, National Fertilisers, Sun Pharma Advanced Research and PNB Gilts.