COMMENTARY
INTERVIEW
SPECIALS
CHAT
ARCHIVES

August 19-22: Market stays depressed

The depressed trend continued on the Bombay Stock Exchange for the second consecutive week following depreciation in the Indian rupee in the forex market against the US dollar and the fear of a petroleum products price hike, besides speculative selling pressure from all corners during the week ended August 22.

The BSE-30 scrips sensitive index dropped below three psychological barriers -- 4300, 4200, 4100 -- to close at 4047.67 points as against 4320.97 points of previous week, suffering a loss of 273.30 points.

The BSE-100 index also dropped below the 1800 mark to 1769.29 points over the last week's close of 1879.22 points losing 109.93 points. The BSE-200 and dollex indices declined by 22.22 and 12.15 points to 397.55 and 183.45 points as compared to last week's close of 419.77 and 183.45 points respectively.

The total turnover on screen-based trading system came down by Rs 7.05 billion to Rs 34.16 billion.

The week started with a holiday on monday on account of 'Raksha Bandhan'. On Tuesday, equity prices tumbled owing to heavy selling pressure from the foreign institutional investors.

During the midweek trading session, the rupee drifted lower to Rs 36, which affected the capital market as foreign and domestic institutional investors adopted a wait-and-watch approach.

The State Bank of India has issued fresh guidelines for incorporating the new rules for assessing working capital limits and advances of loan to corporate sector to boost the capital market, but it failed to improve the sentiment of the investors.

After the announcement of ICI plc that it will acquire 9.1 per cent stake of Asian Paints share, domestic institutional investors, coupled with FIIs, made considerable investment at select counters which were able to arrest the heavy downfall of the pivotal prices.

The approval of the United Front Parliamentary Committee to hike petroleum prices was the other reasons which demoralised investors.

The market conditions were reportedly panicky owing to prime minister I K Gujral's view that the government would shortly fix a band to signal the exchange rate of the rupee in relation to the US dollar, say marketmen.

However, at the fag end of the week, the board of directors of Asian Paints unanimously decided to reject the offer for transfer of shares bought by the British chemical and paint major ICI plc from former director Atul Choksey.

Blue chips including Glaxo India, TISCO, and Burroughs Welcome declared a good performance during the first half of the current financial year.

Meanwhile, speculative prices at National Stock Exchange also suffered a setback on heavy selling pressure from the financial investors and lack of buying support from bull operators.

The NSE-50 index lost by 67.45 points to 1160.45 points as against its previous week's close of 1227.90 points. The midcap index also declined by 33.05 points to 1293.05 points as compared to last week's close of 1326.10 points. The total turnover on the NSE crashed by Rs 1.602 billion to Rs 71.64 billion.

UNI