Financial Daily from THE HINDU group of publications
Friday, Mar 01, 2002
Markets - Stock Markets
Sensex goes south
MUMBAI, Feb. 28
THE stock markets today turned their face firmly against Mr Yashwant Sinha's Budget proposals as share values dived , with a number of active scrips hitting the lower circuit breakers.
While the 30-share benchmark Sensex plunged four per cent or 143.35 points to close at 3562.31, on the NSE, the S&P CNX Nifty index closed lower by 46.90 points (3.91 per cent) at 1142.30.
The closing contrasted with the last year's budget closing. The Sensex, on the same day in 2001, had gone up by 177 points to close at 4247.04. In 2000, it had closed down 293.71 points at 5446.98, with the index hitting an all-time low of 519.88 points in intra-day movement.
Today, stocks across the board nose-dived with IT, PSU, steel and cement scrips bearing the brunt. The selling was also due to the expiry of the derivatives contract for February 2002 and the on-going tension in Gujarat.
Dealers said the hike in surcharge and the status quo in personal tax slabs triggered heavy selling by financial institutions and retail investors. "The increase in surcharge from two to five per cent and the abolition of distribution tax of 10 per cent on companies and mutual funds on dividend incomes (in turn passed on to recipients), led to the negative mood in the markets,'' said a dealer.
Most of the leading counters were hammered downas the Finance Minister announced the tax proposals. In just a few minutes, the Sensex was down by 168 points after some buying was seen at these levels.
Among the major losers were Satyam Computers, Infosys, SBI, MTNL, ICICI, Digital Global, Bharti and ACC. However, PSU stock did not suffer as heavy a hammering as others, indicating market interest in them.
The Chairman, Lazard India, Mr Udayan Bose, said: "There is a general disappointment in the Budget as far as the capital markets go.
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