Gujarat, Defaults Drive Sentiment Down

The Sensex saw a perpendicular fall from a high of 3414.01 reached on the first day of trading to 3349.77 on the next day.

It was quite an eventful week, even as the Mumbai bourse remained closed for the first two days and political factors cast their shadow on the bourse.

While the overall weekly loss in the indices across exchanges has been minimal, the movement in the indices was marked with wide fluctuations on Wednesday and Thursday.

The BSE on Wednesday declared two of its members, Shailesh Bajaj and Shrenik Shah, defaulters, affecting the sentiments.

While the decision against Shah was revoked a day later, there is a general feeling that the larger issues related to defaults still remain unresolved.

The 30-scrip BSE Sensex gained 66.64 points on the first day the market opened. It moved up from its previous close of 3347.37 to 3414.01.

The reason for this sudden spurt was FII buying, mainly into banking and automobile stocks, and short-covering by operators.

Brokers also point out that the bull run at the Calcutta bourse triggered off due to the arrival of the Securities and Exchange Board of India (Sebi) team investigating into short-selling pushed the prices at other stock exchanges that day.

Second, the crisis in Gujarat seemed to be over as the Suresh Mehta government won the vote of confidence.

However, the next day, political events took a dramatic turn with the dismissal of the state government and the imposition of President's rule, sending the market into a tizzy.

The market fell sharply and the gains registered the previous day were wiped out.

On the last day of the trading the market remained quite steady and moved down very marginally.

The Sensex lost just 0.59 points while the fall registered in the NSE-50 was 4.69 over the past week. Market circles say that FIIs are now mainly concentrating in GDR stocks like SBI and Telco and PSU stocks are also considered to be good pickings.

But the recent political developments, the RBI warning on high interest rates and an on-going dull period has resulted in the overall depressed sentiment in the market.

Market circles say that the poor sentiments and declining trend is likely to continue for sometime now.

The market is expected to improve once the fresh allocations are made for the Indian market by the foreign funds.

New Delhi: After witnessing its worst-ever crash in a week of over 50 points, the Delhi Stock Exchange (DSE) index staged a modest recovery of 4 points last week. The index, which had closed the previous week at 738.02 points, closed on Tuesday at 742.95 points, but zoomed up on Wednesday to 764.76 points, recording a gain of 22 points. The gain was, however, shortlived as the index crashed by 18 points the next day, and fell a further 4 points on Friday to close the week at 742.65 points.

The volume of turnover at the bourse, which had dipped in recent weeks to below Rs 100 crore, staged a recovery last week when the average daily turnover was close to Rs 200 crore.

The State Bank of India (SBI) was by far the most sought-after scrip at the bourse and far outstripped the Reliance scrip in terms of turnover.

The SBI scrip gained Rs 6 over the week. After closing the previous week at Rs 258, it closed at Rs 272.10 on Wednesday, but fell to Rs 263 the next day. It finally closed the week at Rs 264.65.

Reliance, on the other hand, recorded a modest gain of less than a rupee.

Having closed the previous week at Rs 197, it touched Rs 205.75 at close on Wednesday, but slid down to Rs 198.50 the next day. It finally closed the week at Rs 197.80.

The other heavyweight, Tisco, recorded a fall of Rs 2 over the week. After closing the previous week at Rs 177, the scrip had a closing rate of Rs 183.25 on Wednesday, but fell to Rs 176.25 the next day. It closed on Friday at Rs 264.65.

Calcutta: Trading at the Calcutta Stock Exchange (CSE) did not reflect any major fluctuations during the week beginning September 13 to September 20.

Though the Calcutta, Delhi and the National stock exchanges were open, investors preferred to stay away and a holiday mood prevailed.

The 51-scrip CSE index drifted down to 430.23 points from the previous Friday's close of 435.04 points. It briefly moved up to 439.42 points and subsequently slid down to settle at 432.07 points.

According to Calcutta brokers, the State Bank of India counter hogged the limelight during the week under review with the roadshows for the bank's GDR issue scheduled for September 21 and the price fixing on October 3.

Alternate buying and selling by foreign institutional investors who bought the scrip at a lower rate in the GDR market ,only to sell it in the domestic market at a higher rate lent volatility to the scrip.

Hectic purchases in the SBI scrip on Wednesday by FIIs pushed up market sentiments and helped others to gain ground during the day.

However, selling pressure at the SBI counter the following day (Thursday) adversely affected the tone of the market and triggered a downtrend at the local bourse.

After closing at Rs 263 the previous Friday, the share-value of SBI retreated to Rs 252. Mid-week, it moved up to Rs 262.50 and finally settled higher at Rs 264.50.

Besides the SBI fiasco, political developments including the dismissal of the BJP government in Gujarat and the imposition of President's rule brought about another spell of uncertainty in the market and affected sentiments on Friday, the first day of the new settlement at the bourse.

Share values of index-based scrips settled marginally higher or continued to hover around their previous Friday's levels.

While ITC regained some of its losses and settled higher at Rs 294 from the previous Friday's close at Rs 286, others like ACC, Tisco and Reliance closed lower than they had the previous Friday.

ACC declined by Rs 115 to close at Rs 1,865, Tisco retreated by Rs 4.50 to Rs 175.50 and Reliance dropped by Rs 2 to settle at Rs 198 last Friday.