The bull frenzy in the equity markets is spilling over to stocks classified into the Z category by the Bombay Stock Exchange.

The odd movements in these stocks has caught the eye of the Securities and Exchange Board of India because some of them had been put in the Z category for showing abnormal price movements in the past.

A Business Standard Research Bureau study shows that 120 of the 283 traded stocks in the Z category resumed trading in August 2003 after lying dormant for months in some cases. In July, 40 stocks returned to the trading ring.

In fact, the shares of only seven companies in this group have been trading daily since January 2003.

Of the 283 Z-group stocks, as many as 67 scaled 52-week highs in August, while 52 recorded 52-week lows.

Sebi sources said while the regulator was keeping close tabs on these scrips, the stock exchanges had also been asked to remain alert.

The sources said various groups in the regulatory body were looking for evidence of abnormal price movements in these stocks and "punishment would be handed out if any market manipulation was found."

The trading pattern in these stocks was no different in 2002. While 60 stocks were not traded on even a single day in 2002, around 107 scrips were traded on 1-10 days and 67 scrips were traded on 10-50 days. Only eight stocks were traded on over 100 days in 2002.

The price appreciation in these stocks over their last traded price has been mind-boggling. The prices of as many as 60 stocks have appreciated over 100 per cent, while 23 have appreciated over 50 per cent.