*Analysts advise caution as 737 stocks hit upper circuit <http://www.thehindubusinessline.com/2009/04/16/stories/2009041651101000.htm> *
** ** ** ** ** ** ** *K.S. Badri Narayanan * Chennai, April 15 Analysts caution investors even as 737 stocks hit the upper circuit on the BSE on Wednesday. This is one fourth of the total stocks that were traded on the BSE however, very few of these were from the BSE 500. As against this, only 83 stocks hit the lower circuit filter. When a stock hits the upper circuit, it means that it has reached the maximum price that it is permitted to move in one trading day. In the upper circuit, there would be only buyers and no sellers, with the pattern being the reverse in the lower circuit. Exchanges fix the range for individual stocks according to their risk profile. However, circuit filter does not apply to a stock if it is also traded in the futures and options segment or is part of any index, which is traded in the derivatives segment. Market participants say that this kind of moves reminds them of the frenzied activity that took place between October 2007 and January 2008. “Every few months one finds the market reaching a stage where insanity takes over and investors commit the same mistake of simply buying without rational or fundamental reasons. This is a stage where one has be extra cautious simply because this is earnings season and the majority of the companies are not going to declare quarterly results but annual results by June 30,” according to Mr Kejriwal of KRIS Securities. Significance of June 30 results means the corporates would announce audited results after the Lok Sabha results are known on May 16, Mr Kejriwal added. “When the market was peaking in January last year, the number of stocks hitting the upper circuit had been on the rise. But what had happened after that is known to every one and retail investors should not forget the lesson they learnt from that,” said another Mumbai-based broker. “Look at the irony of things. On a day when Infosys gave a negative guidance for the year 2009-10, and painted a gloomy picture for the year ahead, our market initially reacted to the guidance, but rebounded. It gives the feeling that only Infosys will do badly, and no other company in India,” said Mr Kejriwal. However, not all are that pessimistic in the market. “Remain invested in good quality mid-cap stocks but don’t leverage” is the advice from Mr V.K. Sharma of Anagram Stockbroking. Most of the stocks that hit the upper circuit were outside the BSE 500 index. There were just 41 stocks from the BSE 500 that hit the upper circuit and three stocks were from the ‘A’ group. Within the various groups of the BSE, 499 stocks were from B and 199 stocks were from S & T groups. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en -~----------~----~----~----~------~----~------~--~---
