|HOME | BUSINESS | NEWS|
|May 16, 1998||
Sensex crashes due to sanctions
Depressed sentiment was witnessed on the country's premier bourse, the Bombay Stock Exchange following five successful nuclear tests by India, which adversely affected the sentiment of investors during the week ended on May 15.
The developed countries reacted to the nuclear tests and imposed sanctions against the country. This demoralised the sentiments of foreign institutional investors, who became wary of investing any fresh funds in the Indian capital market.
However, domestic financial institutions, particularly the Unit Trust of India and Life Insurance Corporation of India showed a huge buying spree throughout the week.
Says BSE president J C Parekh, ''This is an initial reaction from market operators, fearing the stoppage of financial aid by European countries and some sanctions by the United States, but the market will pick up soon.''
Reflecting the downward trend, the BSE sensitive index crashed by 172.40 points to 3849.80 points as against the previous week's close of 4022.20 points.
The broadbased BSE national index also finished at 1700.03 points over the previous week's close of 1771.32 points, losing 70.29 points.
The BSE-200 and dollex index closed at 384.49 and 157.05 points as compared to previous week's close of 401.36 and 167.98 points, declining by 16.87 and 10.93 points respectively. The total turnover on the exchange was Rs 51.99 billion.
During the week, the Securities and Exchange Board of India approved the L C Gupta committee report recommending a phased launch of derivatives trading beginning with stock index futures.
Prime Minister Atal Bihari Vajpayee's statement that India would not hesitate to use nuclear force if the country's security was threatened was another reason for the downtrend in the capital market.
In the mid-week, equity prices zoomed up on renewed buying spree by the foreign institutional investors at select counters and continuous buying interest from UTI and LIC coupled with speculative buyers.
The share prices at the National Stock Exchanges also came down on absence of investors and selling pressure from by bull operators.
The NSE-50 index closed at 1110.10 points as against the previous week's close of 1161.55 points, declining by 51.45 points. The dollar NSE-50 (Defty) index drifted lower by 63.70 points to 948.35 points over the last week's close of 1012.05 points.
The mid cap index finished at 1550.95 points as compared to previous week's close of 1620.50 points decreasing by 69.55 points. The total turnover on the exchange was Rs 95.35 billion.
Tell us what you think of this report
INFOTECH | TRAVEL | LIFE/STYLE | FREEDOM | FEEDBACK