PSU shares took a beating on Wednesday after Zee Business, in a special report named Operation Farzi Bull Run, questioned the authenticity of a recent stunning rally in the space. While stocks such as Scooters India, STC, Andrew Yule, FACT, MMTC and MRPL tumbled as much as 4-10 per cent after the release of the report, counters like UCO Bank, IOC, Central Bank of India and PSB also succumbed to selling pressure, denting the overall market sentiment.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

Here are some of the biggest and most dramatic stock moves in the PSU space on Wednesday:

Stock Before 10:30 am At the close
Scooters India +5% -5%
STC +2% -10%
Andrew Yule -2% -6.6%
KIOCL +9.2% -9%
PSB flat -3.12%
ITDC +1.5 -6%
ITI +6% -8.5%
FACT +4% -2.8%
MMTC -4% -10%
UCO Bank -1.70% -3%
Central Bank 1.33% -3.5%
MRPL -1.30% -4.34%
IOB -1.13% -2.75%

Upon investigation, there was a sharp correction of up to 10 per cent seen in these counters, which, until 10:30 am on Wednesday (October 18), were trading with gains of up to nine per cent.

The PSU space has been the talk of the town on Dalal Street for the past few weeks, with stocks of some of the public enterprises having delivered returns to the tune of 100–200 per cent in the past two months and up to 45 per cent in three days alone.

Why the sharp run-up in these stocks?

The report primarily took into account PSU stocks with government holding of over 90 per cent. This means retail shareholding is anywhere between 1-10% in these counters. Zee Business Managing Editor Anil Singhvi is of the view that, as there is no dearth of capital in the market, by deploying small amounts of funds in such counters, floating stock which was already at very low levels in these stocks can be eliminated, thereby sucking out the liquidity in these counters. And thus, it gets easier to lift prices by cornering shares.

The Operation Farzi Bull Run report covered a string of stocks that have rallied in the recent past without any apparent reason, and sought to protect the interests of small retail investors, especially those with little knowledge of the share market.

stock market updates here. For all other news related to business, politics, tech, sports and auto, visit Zeebiz.com.