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Pokhran blasts sears the markets

Marketmen attributed the bearish phase to various reasons including the postponement of World Bank loans worth $890 million, heavy fall in the rupee value against the American greenback, slide in GDR values in the global market, Standard and Poor's revision of their India outlook from stable to negative, the worldwide fall in the share prices, the poor financial results by Tisco, ACC and IPCL.

The market opened on a better note, after moving in a narrow range. The BSE Sensex registerd a marginal gain of 11 points to 3908.11 points following speculative buying interest by operators. However, from Tuesday onwards, the market then continued slide in the next four trading sessions.

The BSE Sensitive index crashed by 210.71 by surpassing the psychological barrier of 3700 to close at 3686.39 points against the previous close of 3897.10 points.

The BSE-100 index slipped by 81.11 points to 1644.14 points against the previous week's close of 1725.25 points. The BSE-200 and Dollex indices closed lower by 15.46 and 9.76 points to 375.74 and 150.74 points against the previous close of 391.20 and 160.50 points respectively.

Foreign funds pressed sales in the index-based scrips throughout the week, while the domestic institutional investors were reported to have made continous purchases in the fundamentally strong counters, market sources said.

On Thursday, prices of Indian global depository receipts took a hammering on international stock exchanges to crash to a 52-week low at mid-market prices on Wednesday. The Skindia GDR index closed futher lower at 757.19 points on May 28.

Market sentiments weakened sharply following poor performance by the cement giant ACC and steel leader Tisco. Poor results announced by these two companies dampened the sentiment which also gave sufficient reason for some of the foreign funds to press sales.

The rupee value which also reported continous decline throughout the week, registered a net loss of 102 paise against US dollar to Rs 41.68/70 against the previous week's close of Rs 40.65/67 per US unit.

The business volume on the BSE increased by Rs 3.6 billion to Rs 66.8 billion as against Rs 63.16 billion recorded during the previous week.

The net profit of ACC dropped 82.52 per cent to Rs 134.4 million in 1997-98, compared to the Rs 769.2 million in 1996-97. The ACC board has declared a 15 per cent dividend against 30 per cent last year.

Tisco's net profit also dropped 31.35 per cent in 1997-98 to Rs 3.2 billion from Rs 4.7 billion in the previous year. Its turnover however rose 1.38 per cent to Rs 64.3 billion from Rs 63.5 billion.

Prime scrips including ACC fell sharply by Rs 116.25 to Rs 1678.75, Bajaj Auto by Rs 30.75 to Rs 616.25, Hind Lever by Rs 66 to Rs 1593, IPCL by Rs 5.40 to Rs 65.30, Reliance by Rs 13.50 to Rs 167.00, State Bank down by Rs 13.50 to rs 242.00, Telco moved down by Rs 25 to Rs 243 while Tisco held steady at Rs 150.10.

The market, which was already passing through a severe hammering, suffered yet another setback on late Friday following five nuclear tests by Pakistan in reply to India's five tests. However, the RBI made timely statements ruling out any possibility of financial implication on India of the Pakistan's test. The RBI also said that it is closely monitoring the developments.

Finance Minister Yashwant Sinha also expressed confidence on the Indian economy and ruled out any major fall in the rupee value due to recent developments. These favourable statements strenghtend the confidence of the marketmen, said a stock market analyst.

A similar trend was witnessed on the national stock exchange during the week ended May 29.

The NSE's popular index NSE-50 (Nifty) index declined sharply by 63.40 points to 1063.15 points against the previous week's close of 1126.55 points.

The Dollar NSE-50 (Defty) index also registered a loss of 78.35 points to 882.85 points as against the previous close of 960.20 points. The Midcap index eased by 20.15 points to 1620.20 as against the previous close of 1640.35 points.

The total turnover on the NSE increased smartly by Rs 11.7 million to Rs 98.2 billion as against Rs 86.5 billion recorded during the previous week.

The National Stock Exchanage will conduct a special budget trading session after the normal session on June 1. The market will open from 0930 hours to 1500 hours for the normal session and from 1800 hours to 2000 hours for the special trading after the presentation of the budget for 1998-1999.

Similarly, the BSE will conduct a pre-budget session and post-budget session on the budget day, an official said.

UNI