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Fall year that was: Sensex lost 25 per cent as shares touched record lows

The Asian crisis pushed the Sensex on the Bombay Stock Exchange down by a quarter during the Samvat year 2054, which resulted in the fall in share prices to their record lows.

According to statistics available from market sources during the year, the Sensex lost 25.11 per cent (955.13 points). In comparison, the stock indices at Tokyo were down by 21.22 per cent (Nikkei down by 3576.50 points) at 13280.54 and the Hang Seng index at Hong Kong was lower by 9.18 per cent (988.29 points) at 9777.01.

In the West, the New York market behaved indifferently as the Dow Jones recorded a smart gain of 10.68 per cent (801.04 points) at 8299.36 during the period between October 29, 1997, and October 16, 1998.

Back home, the 30-scrip BSE Sensex started at 3803.24 on the first day of Samvat 2054 (October 30, 1997) and closed at 2848.11 points today, the last day of Samvat-2054, registering a whopping loss of 955.13 points during the year, statistics reveal.

Analysts attributed the depressed trend to political uncertainty, sanctions subsequent to nuclear tests, slackness in domestic demand, uncertainty over the Unit Trust of India's financial health following the US-64 scheme showing a negative balance of over Rs 10 billion in its reserves, inflation, Union budget not meeting business expectations and the South-East Asian currency crisis.

According to stock-brokers, these factors led to lack of major buying interest among the foreign institutional investors.

According to the provisional figures, gross FII purchases stood at Rs 127.63 billion against the gross sales of Rs 149.79 billion, showing a net FII outflow of Rs 22.15 billion during the period November 1997-October 1998.

According to Jignesh Shah, analyst at the Triumph International Finance India Limited, the foreign investors were pulling out because of redemption pressure and a desire to exit from the Asian region. They are desperate to protect their portfolios from further erosion in values, he said.

The institutionalisation of the markets has ensured that every withdrawal has a major impact. Shah further said to shore up the falling Sensex, the UTI continuously provided support at 2800 levels in last two-three months.

Recalling the olden days, senior BSE broker Kanchanlal Vakharia said 'Samvat' has lost its importance since the exchange and the brokers' offices gave up the old accounting systems after the government's restrictions to work under the financial year system.

The entry of computers also forced them to change accordingly. Prior to computerisation, the business year used to end before dhan teras and new books use to come into force on Diwali day.

''After Laxmi Pooja (Diwali day), the moorat trading used to be performed. Although the old accounting system is gone, we are continuing to perform moorat trading on the Diwali day as per the tradition,'' he said.

The sectors which performed exceedingly well during Samvat 2054 are those where growth is visible -- information technology, pharmaceuticals and fast moving consumer goods.

The sectors which performed miserably are cyclical sectors like steel, cement, paper, petrochemicals and automobiles.

The information technology stocks went up based on the excellent financial performance of the companies. Among these, front-runners are Infosys Technologies, Wipro, NIIT and Satyam Computers.

Among the gainers, Infosys Technologies went up from Rs 1,330 after taking support at Rs 1,077 to the high of Rs 2,798 and it quoted at Rs 2,316 today.

Similarly, Wipro started at Rs 571, touched a high of 2050 and is currently quoted at Rs 1,920, Satyam opened at Rs 156, touched the high of Rs 614 and ended at Rs 556.

Among the pharma stocks which performed well are Dr Reddy's (up from Rs 330 to Rs 468), Burroughs Wellcome (Rs 353 to Rs 492), Merck (Rs 215 to Rs 319), German Remedies (Rs 241 to Rs 562), Knoll Pharma (Rs 333 to Rs 411.25), Pfizer (Rs 379 to Rs 685).

Novartis, Unichem Lab and Cipla also reported smart gains.

While among the losers, in the steel sector Tata Steel and SAIL performed poorly during the year. SAIL fell from Rs 15 to Rs 5, Tisco declined to Rs 76 from Rs 169.75. Essar Gujarat and Jindal Vijaynagar also fared poorly.

Among the cement stocks, front-runners like ACC and Gujarat Ambuja Cement also fared poorly. ACC opened at Rs 1,172, touched a high of Rs 1,846 and ended at Rs 932.

Among papers stocks, Tamil Nadu Newsprint fell from the opening level of Rs 42 to Rs 18, and ITC Bhadrachalam with an opening of Rs 48.25 closed at Rs 21.85. Among petrochemical stocks, IPCL fell from Rs 97 to Rs 51.50. Even Reliance finished lower at Rs 105.70 from Rs 188.

Among the automobile stocks, Telco ended lower at Rs 103.80 from Rs 326.75, while Ashok Leyland quoted lower at Rs 21 from the Samvat opening of Rs 21.

RELATED REPORT:
Sensex winds up the year at 2848.11

UNI