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Depressed week at BSE

A depressed trend prevailed on the Bombay Stock Exchange during the week ended September 12, following several negative factors including the depreciation of the Indian currency against US dollar, unfavourable statement made by the Finance Minister P Chidambaram on reduction of the fiscal deficit, and mixed support from the market players foreign institutional investors on buying and selling bouts.

During the week, Finance Secretary Montek Singh Ahluwalia said that the finance ministry is in favour of implementing the J R Verma Committee report on the modified carry-forward system, but a lack of consensus among the brokers and investing community on the issue has been responsible for the delay in implementing the badla system.

The BSE sensitive index (30 scrips) declined by 36.41 points to 3995.94 points as compared to the previous week's close of 4032.35 points. The BSE-100 index came down to 1740.60 points over the last week's close of 1755.40 points, suffering a loss of 14.80 points.

The BSE-200 and dollex indices decreased by 02.47 and 01.03 points to 389.85 and 177.63 points as against its previous week's close of 392.32 and 178.66 points respectively.

The total turnover declined by Rs 2.7 billion to Rs 42.7 billion as compared to the previous week's total turnover of Rs 45.4 billion.

The Reserve Bank of India warned the government in its annual report for 1996-97, that it will find it difficult to rein in fiscal deficit under the target of 4.5 per cent of the gross domestic product in 1997-98 unless it takes some hard decisions on subsidies and administered prices.

The volatility in the Southeast Asian market demoralised the sentiment of the FIIs to invest in the Indian capital market but due to the strong fundamentals, the Indian economy did not suffer much. The RBI has refrained the new non-banking finance companies from accepting public deposit for the first two years, during the period RBI has also given registration to four new NBFC.

The Securities and Exchange Board of India has decided to permit issuers to use 100 per cent book building route and decided that the present stipulation of priority for small investors will continue.

The week began well with good buying support from FIIs and domestic institutional investors coupled with general investors. In mid-week, equity prices gradually came down on lack of buying support following a continuous fall of the Indian rupee, profit booking by the bull operators and common investors at higher level.

During the week, five members of the National Stock Exchange were declared defaulters either for introducing fake/forged shares or for their inability to fulfill pay-in obligations. Thus the total of defaulters rose to 15 at NSE.

Pivotal prices at NSE declined marginally on sustained selling pressure from the financial institutions and common investors. The NSE-50 index closed at 1142.85 points as against its previous week's close of 1149.25 points, suffering a loss of 6.40 points.

However, the mid-cap index rose to 1289.00 points over the last week's close of 1279.90 points showing a net gain of 09.10 points. The total turnover on NSE eased by Rs 16.3 billion to Rs 74.8 billion as compared to last week's total turnover of Rs 91.1 billion.

UNI