Modified adla' Deferment Hits Market Sentiment

The stock market remained volatile throughout last week. Share prices rose sharply at the beginning of the week but declined in the later sessions.

The initial buoyancy in the stock market was on account of strong rumours that the Securities and Exchange Board of India (Sebi) would accept the modified carry-forward system (MCFS).

But later on the market dipped on heavy selling pressure as it became clear that the MCFS would not materialise in the near future.

The impending decision to hike petroleum prices may finally come through by August 21.

On anticipation of the same, the stock market witnessed lacklustre trading and volumes remained low. Trading sentiment at the BSE was also affected because the market was in a holiday mood.

Sensing the bearish sentiment, the 30-share BSE Sensex closed the week at 4320.97 points, down by 77.65 points over the previous week's close of 4397.32.

Brokers at the BSE also attributed the downtrend in the stock market to lack

of buying from FIIs.

FIIs made limited purchases during the week, said a FII fund manager.

The market was overheated in the last trading sessions as prices of some scrips had risen quite sharply making a correction necessary, he added.

Among the major gainers of the week was Sterlite. The scrip closed at Rs 256 - up by Rs 27 on news that the company had been allowed to restart its plant at Tamil Nadu.

IDBI came out with good quarterly results with the net profit going up by 38 per cent. The scrip closed at Rs 110, up by Rs 3 over the previous day's close.

Cadbury, on the other hand, slumped by Rs 28 over the previous week's close on news that the company had reported lower half-yearly profits. Colgate also declined by Rs 17 to close at Rs 345 on rumours that it was pruning its dividend for the first time in ten years.

'The stock market will go up only when issues like the petroleum price hike become clear. Till then the market will continue to show lacklustre trading,' added a BSE broker.

NEW DELHI: The market remained sluggish in response to the lukewarm support extended to it by FII's and domestic players, following the Sebi move to defer its decision on the revised carry forward trading system.

The prevailing holiday mood at the Delhi Stock Exchange on account of Independence day and `raksha bandhan', coupled with the Union government's indecisiveness also contributed to a quiet period during the week ended August 14.The DSE Index shed 28.11 points to settle at 907.26 as against last week's close of 935.37.

According to market analysts, as investors were expecting Sebi to accept the J R Varma Committee's recommendations on revised 'badla' system, they turned subdued, with the board postponing discussion on the issue to its next meeting, scheduled for September 5 in Chennai.

The operators were also dismayed by the United Front Steering Committee's move to defer its decision on hiking petroleum and other related products' prices to its next meeting tentatively scheduled for August 21.

Mahanagar Telephone Nigam Limited dropped Rs 12.90 to close at Rs 275.

Asian Hotels shed Rs 12.25 to close at Rs 217.75. Other major losers were ITC, Reliance Industries Telco, Tisco, Chambal Fertilisers, DCM Daewoo Motors, Escorts, Essar Shipping, Hindustan Development Corporation, and Larsen and Toubro.

The gainers numbered just a handful and were led by Hero Honda, which rose by Rs 27 to close at Rs 587. ICICI gained Rs 5.25 to close at Rs 100.15.