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Stock rally snaps

Mumbai, Dec. 9: The absence of a clear time-table for selling the government’s stake in the petroleum twins halted a fledgling stock rally in its tracks, sending the sensex tumbling 36.98 points to 3269.31 from 3306.29 on Friday.

Disinvestment minister Arun Shourie failed to meet the expectations of a market that had been hoping for a big headway in the sale of public sector companies by not spelling out when the deals would be wrapped up. What jangled nerves more was the indication that the sales could spill over to the next financial year.

Investors who had backed PSUs to the hilt on Friday were dismayed at Shourie’s tame Parliament declaration after a week-end of heightened expectations. HPCL, the centre-piece of the PSU pack, had a roller-coaster ride — opening at Rs 282.20, shooting up to an intra-day high of Rs 288, plummeting to Rs 237 before finishing the session with a 2 per cent loss at Rs 269. BPCL, which the government intends to divest through a public offer, surrendered 5 per cent at Rs 204.80.

Other state-owned firms that took it on their chin were Nalco, Container Corp, BEML, BEL, Engineers India, Dredging Corp, RCF and SCI. Software shares also gave up early gains notched up after the announcement on Infosys’ ADS issue.

“I would have been happier had the minister given us a road-map. If privatisation is held up next year for other reasons, there is a fear that the process will never see the light of the day. We have general elections in 2004,” an analyst working for a foreign brokerage said.

Others saw things differently. Said Jignesh Shah, strategist at ASK RJ Investment Management: “In any case, disinvestment was never supposed to happen this year. Today's fall was a technical correction. I expect strategic sale in HPCL in the first quarter of next year.”

Anxiety peaked towards the end of the day as a laconic Shourie left investors guessing on how early the government planned to press ahead with the much-delayed selloff.

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