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October 24, 1998 |
Subdued sentiment shows signs of shaping up after Sinha's visitUncertainty over the future of Unit Trust of India's flagship scheme, the US-64, bear hammering of traditionally ''favourite'' stocks and a general slowdown in performance of the corporate sector marked the ushering of Samvat 2055 and led the Sensex of the Bombay Stock Exchange to plunge during the week ended October 23. The BSE-30 Sensitive Index ended at 2784.46 as against the previous week's closing of 2848.11, showing a net loss of 63.65 points. The BSE-100 index closed at 1246, shedding 23.53 points, the BSE-200 index ended at 295.66, declining by 5.16 points and the Dollex index fell by 2.03 points to end the week at 114.37. The beginning of Samvat 2055 witnessed the market dumping stocks belonging to commodity-based companies. According to marketmen, the new favourites are scrips of brand- and idea-driven companies. Reflecting this phenomenon, infotech majors like Infosys Technologies, Satyam Computers and NIIT were ruling high, while conventionally accepted scrips like Telco, IDBI, Reliance and ACC were hammered by the bears. According to market-watchers, the stock market is seriously discounting the expected half-yearly results of the corporates. ''For the time being, the Sensex will continue on its southward journey,'' remarked an analyst with a leading domestic brokerage. The Sensex rose slightly on the day of moorat trading on October 19, when domestic operators picked up nominal quantities of index-based scrips. The next day, the market plunged by 89 points due to offloading of stocks like Reliance, Telco, Tisco, Satyam Computers and ACC by the FIIs. The retail investor's favourite Reliance fell below the Rs 100 mark on that day. It later recovered slightly to close at 101.90. Commenting on Reliance, Kotak Securities' head of research Rajshekhar Iyer said, ''Reliance is basically in the global commodities business. It is quiet natural that the global recession and glut in the world commodity trade has affected the company's fortunes. Reliance has large volumes. Therefore, its profits don't take a beating. However, the market recognises these fundamental factors that may affect the company's performance in the future.'' On October 21, Finance Secretary Vijay Kelkar visited Bombay and met UTI chairman P S Subramanyam to discuss options to rejuvenate the US-64 Scheme. The market rebounded on Friday due to buying interest from the FIIs and domestic institutions. Mirroring the bearish phase, the S&P CNX Nifty of the National Stock Exchange fell by 22.15 points to end at 817.35 as against last week's close of 839.50. The CNX Nifty Junior declined by 11.25 points to end at 1411.60, S&P CNX Defty closed at 669.70 points, showing a net loss of 17.75 points, S&P CNX 500 and CNX Midcap 200 eased by 14.8 and 7.72 points to end at 563.56 and 501.27 respectively. UNI |
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