BSE hits year-low with no recovery in sight
THE Bombay Stock Exchange (BSE) 30-share sensitive index slumped on Friday to a new 52-week low of 3,375.05, beating by 20 points the low of 3,395 touched on January 24.
This meant that the Sensex had declined 101 points in a mere two trading sessions, on Thursday and Friday.
Since the start of the new year, the index has plummeted 550 points, or more than 15 per cent.
With the substantial 27 per cent slide in the index, from the high mark of 4,643, reached on September 12 last year, the aggregate wealth of the investing public has evaporated to the extent of 1.4 trillion rupees (about HK$354.2 billion).
At the peak mark of the Sensex in September, the market capitalisation of all shares was estimated at 5.2 trillion rupees.
The rash of initial public offerings, to the tune of 115 billion rupees, during January and February, has done much to sap the liquidity in the market.
The continuing ban on forward trading has also resulted in poor trading volumes.
Other major reasons for the sagging tendency in the market were the continuing political uncertainty pending the declaration of the state assembly election results, the increase in the lending rates by banks and financial institutions, and the absence of buying by foreign institutional investors.
In addition, several mutual funds have turned net sellers to book whatever profits they can before their financial year ends on March 31.
There seems little likelihood of the market showing a recovery in the immediate future, until the assembly election results in six states are announced between March 11 and 13 and the Union budget for 1995-96 is presented on March 15.
