Holidays To Curb Trading On Bourses

The first month of the new financial year 1997-98 will witness a spate of holidays starting today.

While the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) are closed today on account of Gudi Padwa, they will also remain closed on three days in the next week on account of Ambedkar Jayanti (April 14), Ram Navi (April 16) and Bakri Id (April 18). Brokers said the holidays and political uncertainty will result in a slump in trading volumes.

Market players are worried that the spate of holidays will have a negative impact on the market. The UF government will face the crucial vote of confidence on April 11. With the market remaining closed for so many days, there may be a panic reaction when it opens on April 15, said brokers.

 

"If there is an unfavourable development on April 11, then the market may witness a major slump on April 15. The reaction may not be so severe if it were to remain open on April 14, 16 and 18," said a leading BSE broker.

Jaydeep Mehta, a NSE dealer, said: "The series of holidays would further make the market even dull, specially in the current political scenario. We must learn from the international trend and cut down on the number of holidays."

Brokers fear that there could be rampant trading outside the market if the present government falls or fresh elections are announced.

"A series of holidays like this one prevents brokers from switching their positions from one exchange to the other. In case a major development on a holiday, most of the trading takes place outside the exchange which severely affects the opening level on the next day," Sandeep Jain of Anagram Finance.

BSE president M G Damani was of the view that the holidays are agreed upon at the beginning of the year and cannot be changed arbitrarily.