Mar 3, 2001|
Budget, Balco and boomerang bourses
This has been a more than eventful week with the budget, Balco disinvestment and the boomerang bourses (B cube). The indices, which continued to slide in the run up to the budget, were adrenalised with Mr. Sinha's budget speech. However, sentiments came crashing down on frantic Friday.
As budget day came closer it seems market participants started to book profits. The Sensex which gained 360 points (9%) in the first 6 weeks of the year saw all its gains being washed away in the last two weeks. As per market musings, positions that had been built, especially in the old economy stocks, in the run-up to the budget, would see squaring off before or after the event. With the pre-budget slide and Mr. Sinha's well-acclaimed budget one would have expected the indices to stabilize at higher levels. But with financial markets displaying their own gravity the indices came crashing down bemusing many. Several rumours are floating around having their own theory for such market behaviour. Difficulty in meeting payment commitments by an influential broker is one such story doing the rounds.
Another important development was the sale of Balco. Sentiments on the PSU counter and as a whole took a beating as the opposition and few allied parties raised a ruckus on the issue. Frayed nerves were smoothened somewhat as the deal was passed by the Lok Sabha, which voted on the issue. The passing of the deal also indicates some semblance of political stability, as the ruling party has been able to maintain some cohesiveness in its allied camp. Nevertheless, all is not over. The Balco unions have decided to go on strike. Further, Mr. Ajit Jogi, Chief Minister of Chattisgarh, has threatened to cancel the mining lease of Balco. With these roadblocks still in the way PSU counters could remain edgy (speculative) as the Government attempts at ironing out the creases.
The markets are closed on Tuesday. Therefore, NSE settlement day will be a day earlier (Monday). With NASDAQ being southbound more weakness on TMT counters is expected. Markets could also remain weak as participants come to terms with the current fall.
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