MUMBAI, 5 JUNE: Dalal Street is rife with speculations that many traders and high net-worth investors booked heavy profits over the weekend through buying and selling of Infosys Technologies’ shares as they had an inkling about the return of Mr NR Narayan Murthy as executive chairman of the company.
Analysts have seen a spurt in purchase of Infosys shares in the final hour of trade on last Friday. The demand and some big deals in Infosys shares during the late afternoon trade, it is confirmed, helped the share price go up by more than 2.5 per cent, while the benchmark Sensex was down 2.25 per cent on the last day of the previous week.
Now it is being claimed by a section of brokerage that some traders did know about Mr Murthy’s comeback to put Infosys Technologies back on progress-track.
Jump in daily average volumes on both the Bombay Stock Exchange and National Stock Exchange during the period is now being cited to substantiate this point.
A quick calculation by a stock firm suggests if an investor had bought 1,000 Infosys shares at that day’s (Friday) lowest price of Rs 2,383 and sold them on Monday this week amid rising demand for the stock ~ after the announcement of the change at the helm ~ at a top price of Rs 2,625 on the BSE, the putative investor could have booked a net profit of nearly Rs 2.5 lakh.
“But this is how stock market operates and thrives as it happens quite often in some share or the other,” said a stock broker.
Some traders, however, have come up with a different set of reasons to explain why Infosys shares were bought and sold so heavily between Friday and Monday. According to them, fast declining rupee against the American dollar brightened the profit prospects of the country’s information technology companies as it would bolster their businesses.
Investors bought Infosys shares to create fresh positions after previous day’s (Thursday) expiry of May derivatives series. This, they say, explains demand for this IT share, which analysts say appears quite logical.
But the question remains why the spurt in Infosys buying at the end of May series only? It never happened earlier.
The traders say the deals and subsequent profit earning by “fortunate” traders cannot be termed as insider trading since the buying and selling was based on sheer common sense displayed by business-minded investors. It was their way of welcoming Mr NR Narayan Murthy.
Analysts have seen a spurt in purchase of Infosys shares in the final hour of trade on last Friday. The demand and some big deals in Infosys during the late afternoon trade, it is confirmed, helped the share price go up by more than 2.5 per cent, while the benchmark Sensex was down 2.25 per cent during the day