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Subdued week ahead for Indian markets due to Wall Street gloom
Monday, 16 September 2002, 19:30 IST
MUMBAI: As the Indian market wrapped up a lackluster trading week Friday, there is little cheer in store for jittery investors in the sessions ahead with activity likely to remain depressed in the absence of any positive signs.
Analysts say the sustained downturn in the U.S. markets on mounting talk of war with Iraq and the steady drumming of profit warnings will also keep operators on the sidelines after declines in two consecutive weeks.
"There is a lot of portfolio churning going on at the moment but fresh buying in both new as well as old economy sector is very limited," said a fund manager with a foreign brokerage firm.
"In the absence of any positive trigger, operators would prefer to sit on their cash and wait for the market to chart a particular pattern. I think the outlook would continue to be cautious in the days ahead," the fund manager said.
For the week, the market barometer 30-share Bombay Stock Exchange sensitive index or Sensex closed on Friday at 3,098.94, a fall of 42.17 points or 1.34 percent from its previous week's close.
In the last two consecutive weeks, the market index has shed 82.29 points or 2.6 percent on across-the-board selling pressure.
"There won't be much change in the current trading pattern next week. Basically the market sentiment will be driven by uncertainty in global markets and the rising possibility of a U.S. conflict with Iraq," said a market analyst.
U.S. President George Bush helped spur a sell-off on Wall Street towards the weekend after he told the U.N. General Assembly "action will be unavoidable" against Iraq unless the United Nations takes a hard line against Saddam Hussein.
Bush said he was "highly doubtful" the Iraqi leader would meet conditions for averting military action.
The specter of war has created a sense of uncertainty in the Indian market, as investors worry over its impact on the brittle global economic recovery and already rising oil prices in the international marketplace.
"On the domestic front, I don't see any news that would have a positive impact on the market mood. The bearish mood created by the deferment of the privatization of two public sector oil companies is likely to linger," the analyst added.
The analyst was referring to the government's decision to putt-off the proposal to sell the state's stake in two of the nation's biggest oil companies - Hindustan Petroleum Corporation Ltd. (HPCL) and Bharat Petroleum Corporation Ltd. (BPCL).
India's ambitious reforms program received a major blow last weekend as the cabinet put off by three months its plans to sell the government's stake in HPCL and BPCL due to differences within the ruling coalition.
"The deferment clearly shows the differences within the government. The decision will have a bearing on all tough reforms initiatives in the future and this is very bad news for the financial market," the analyst added.
The latest setback to the country's privatization drive comes after the government ignored opposition to the sale of its stake in a telecom giant, an oil firm and the country's largest joint venture carmaker earlier this year.
India plans to raise 
120 billion from sale of stakes in state-owned firms in the current financial year. It has repeatedly failed to meet targets in the past because of stiff protests from opposition parties and trade unions.
In the holiday-truncated intra week trade ended Friday, the market mood was badly affected by the government's decision to defer the privatization initiative.
The market opened the week sharply lower and after moving in a close range for the better part of the trading week, it plunged deeper into red towards the end of the session as bruised investors rushed to book profit on heavyweight counters.
Stock markets, foreign exchange and commodity trading were closed in India's financial capital Tuesday for the Hindu festival of 'Ganesh Chaturthi'.
Blue-chip technology shares, which rose sharply higher in early-week trade buoyed by a rally in the U.S. markets, trimmed their gains towards the weekend after data showed a jump in the number of Americans signing up for unemployment benefits.
Indian tech companies depend heavily on the U.S. for product sales. Infosys Technologies, India's largest listed software exporter, gained 1.3 percent over its previous week's close to touch 3,580.30.
Stocks of cement companies got a boost from hopes that manufacturers would raise prices again as demand rises after the end of monsoon season. They had raised prices by 10-12 per 50 kg bag in Mumbai last week.
Associated Cement Companies, the cement industry leader, rose 4.8 percent to 144.90. Shares of tobacco giant ITC ended 3.2 percent higher at 684.55 on rumors that it had raised prices of a key brand by 8.6 percent.
Source: IANS
120 billion from sale of stakes in state-owned firms in the current financial year. It has repeatedly failed to meet targets in the past because of stiff protests from opposition parties and trade unions.
In the holiday-truncated intra week trade ended Friday, the market mood was badly affected by the government's decision to defer the privatization initiative.
The market opened the week sharply lower and after moving in a close range for the better part of the trading week, it plunged deeper into red towards the end of the session as bruised investors rushed to book profit on heavyweight counters.
Stock markets, foreign exchange and commodity trading were closed in India's financial capital Tuesday for the Hindu festival of 'Ganesh Chaturthi'.
Blue-chip technology shares, which rose sharply higher in early-week trade buoyed by a rally in the U.S. markets, trimmed their gains towards the weekend after data showed a jump in the number of Americans signing up for unemployment benefits.
Indian tech companies depend heavily on the U.S. for product sales. Infosys Technologies, India's largest listed software exporter, gained 1.3 percent over its previous week's close to touch 3,580.30.
Stocks of cement companies got a boost from hopes that manufacturers would raise prices again as demand rises after the end of monsoon season. They had raised prices by 10-12 per 50 kg bag in Mumbai last week.
Associated Cement Companies, the cement industry leader, rose 4.8 percent to 144.90. Shares of tobacco giant ITC ended 3.2 percent higher at 684.55 on rumors that it had raised prices of a key brand by 8.6 percent.
Source: IANS