Bourse lifts from 22-month low on bargain hunting

Thursday, 31 May 2012 01:46 - - {{hitsCtrl.values.hits}}

Reuters: The stock market rose on Wednesday for the first time in eight sessions as investors snapped up discount shares after month-end settlements and margin calls.

The main index rose 0.79 per cent, or 37.90 points, to 4,851.16, up from its lowest close since 20 July 2010.

“There has been some bargain hunting,” said one stockbroker, speaking on condition of anonymity. “It seems the month end settlements are over and (we have) seen some buying coming in.”

The bourse had lost 7.8 per cent in seven consecutive sessions until Wednesday, as mostly retail investors unloaded their stakes as a result of concerns about new regulatory measures, uncertainty over the rupee currency, rising interest rates, and slowing economic growth.

Last week, the Securities and Exchange Commission (SEC) issued a rule barring brokers from selling shares for six months from the day of buying, a move which triggered selling.

Foreign investors sold a net Rs. 110.4 million worth of shares on Wednesday, but they have been net buyers of Rs. 22.5 billion so far this year. Turnover was Rs. 673.7 million.

The market is one of the worst performers in Asia, having fallen 19.91 per cent since the start of the year.

The rupee fell to 132.40/60 against the dollar on Wednesday, its lowest since 25 April, from Tuesday’s close of 132.00/10 on importer demand for dollars in light trade.