Money > Budget > Budget News & Analysis FEBRUARY 13, 2002 I 12:05 IST rediff.com
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Sensex seen climbing till Budget

Sangita Shah & Rakesh P Sharma

The upward trend on the bourses would continue up to the budget with the BSE Sensex gaining 150-200 points, a cross-section of market players have forecast.

They said the Sensex would be driven up - with corrections taking place in phases - by the string of announcements the government was expected to make in the run-up to the Budget against the backdrop of the coming elections in certain states.

The Sensex lost 17.77 points on Tuesday to close at 3,497.68, down 0.51 per cent from Monday's close, on the back of large-scale profit-booking.

But Nimish Shah, CEO and director of Parag Parikh Securities, said: "The undertone is bullish and announcements in the run-up to the elections will keep the market firm. Moreover, since the budget will be presented well after the elections, some harsh measures cannot be ruled out to reign in the burgeoning fiscal deficit. However, that will also be good for the economy in general."

Some technical analysts expect the Sensex to move up further, but say the turning point is 3,650.

"Technically, if the market crosses 3,545, it could move up to 3,650 or 3,700. Once the Sensex crosses 3,650 firmly, the market will enter a new bull phase," Vijay Bhambawani, managing director of Bhambawani Securities, said.

Explaining the reason for the bullish undertone, Sindhu Sameer, vice-president of UTI Securities, said share prices had reached almost a two-year low. "Moreover, if you look at the level of 3,200 points immediately after the September 11 event, the markets have hardly seen a rally. So, it should not come as a surprise if the Sensex moves to the 3,700 level," he said.

Pradeep Doshi, a member of BSE, also echoed the same sentiments. "The markets have been enthused by the recent big-ticket divestments and the government's commitment to reforms. This will be further fuelled if there are a few more announcements in the next few days as expected by the market," he said.

There are others who feel that for the upward trend to continue, new announcements are required. "The markets will get a shot in the arm if the government comes out with a time-bound plan for its divestment of the car-manufacturing business," John Band, CEO of ASK Raymond James, said.

"Looking at volatility and volumes, the Sensex may gradually drift downwards if there is no positive news to keep it moving up," Anup Bagchi, COO of ICICIdirect.com said.

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