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LS dissolution hits exchanges sentiments

The BSE Sensex lost by 91 points during the week. Marketmen said that the market would have reacted further more, however, the major loss in the share prices was averted by the Reserve Bank of India's immediate measures to arrest the rupee fall and successful pricing of MTNL's GDR issue in London during the same week.

The rupee crossed the psychological barrier of 39.00 and touched yet another low of Rs 39.85-92 at the beginning of the week, but recovered to Rs 38.80-87 at the end of the week.

Despite political uncertainty, the MTNL GDR was well received by foreign institutional investors, non-resident Indians abroad and averted a major fall on the domestic bourses, marketmen said.

Reflecting the bearish phase, the BSE Sensitive Index lost by 91.21 points to 3469.08 points as against the previous week's close of 3560.29 points. Similarly, the BSE-100 Index drifted lower by 38.72 points to 1504.38 points against the previous close of 1543.10 points.

The BSE-200 and Dollex Indices closed lower by 9.12 and 4.24 points to 337.79 and 145.51 points over the previous week's close of 346.91 and 149.75 points respectively.

The total turnover on the BSE reported during the week declined by Rs 6.1 billion to Rs 43.2 billion as against Rs 50.3 billion registered during the previous week.

The market opened on a cautious note on Monday and pivotals moved in narrow range. After initial losses, pivotals gained marginally at the end of the week. However, the record fall in rupee value and fluid political situation made the marketmen nervous and the market continued downtrend thereafter during the week.

Raids conducted by the Income Tax Department officials on over 30 broking firms of Bombay Stock Exchange on their reported involvement in hawala transactions also had adverse impact on the trading on the country's premier bourse during the last two days, BSE sources said.

According to sources, the IT Department had frozen about 30 bank accounts of over 23 brokers belonging to BSE.

The domestic institutional investors like Unit Trust of India and Life Insurance Corporation continued their support to the falling market while foreign institutional investors postponed their long-term commitment and adopted wait-and-watch attitude in view of new political developments, market sources said.

A similar trend was witnessed on the National Stock Exchange during the same week.

The Nifty (NSE-50 Index) declined by 17.65 points to 1006.30 points over the previous week's close of 1023.95 points. The newly constituted Dollar NSE-50 Index (Defty) drifted lower by 22.05 points to 897.59 as against the previous close of 909.55 points while the Midcap Index also fell by 15.40 points to 1143.80 points as against the previous close of 1159.20 points.

The total turnover on the NSE dropped by Rs 9.6 billion to Rs 84.9 billion as against Rs 94.5 billion during the week.

UNI