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Three months behind on last day

Mumbai, March 31: Stocks wrapped the last day of this financial year with losses fanned by the reality of a long haul in Iraq and fears of bleak growth forecasts from companies that reel out their annual scorecards soon.

Information technology shares, not going through the best of times anyway, suffered at the hands of investors who set the Dalal Street clock back by over three months by swarming the counters with sell orders. At 3048.72, the Bombay Stock Exchange (BSE) shed 66.72 points in a session dogged by concerns about the war and the degree to which it will squeeze profits.

The scare comes days before software companies announce fourth quarter results and their assessment of the business prospects. As the markets hurtle into the new year, most analysts feel the undertone will continue to be negative with Iraq remaining the biggest worry.

“Concerns are growing that a protracted war could hit orders for domestic software companies from the US,” said a broker trying to explain why stocks are shunned.

The pessimism is a contrast to the sigh of relief in the markets when the US first pounded Iraq 13 days back. Shares had rallied then on hopes that the assault would lead a swift outcome and nudge markets out of uncertainty.

But, the heady feeling was smothered by reports of growing resistance from Saddam Hussein’s troops and the grim reality of having to cope with mounting US casualties.

Software majors, fishing for clues in the quagmire of the conflict, are unlikely to dish out strong guidance for the next year. Yet, there are some who believe that any cut in infotech spending by the US would be substituted by increase in offshore orders for local firms. Infosys lost 5.23 per cent or Rs 223.05 to Rs 4040.30 while Satyam slipped by over 7.70 per cent to Rs 176.95; Wipro closed 5.60 per cent lower at Rs 1228.35.

The 30-share sensex opened at 3106.93, dipped to its intra-day low of 3039.83 before closing at 3048.72 compared with 3115.44 on Friday. Brokers said the selling also spread to key stocks like Reliance Industries and Hindustan Lever. Bank shares, which had been among the best performers in recent weeks, swooned. The volume of business on BSE was substantially lower at Rs 843.12 crore. Infosys was the top traded share with a turnover of Rs 130.05 crore.

Roll faster

Starting Tuesday, leading exchanges will shift to T+2 rolling cycle, a shorter securities settlement mode. This should square off deals in a day, protect investors’ interest and set the ground for T+1 cycle in future. The shift means transactions — pay-ins and pay-outs —would be sealed in two days following trading day. With a view to facilitating the new system, the RBI will introduce a special electronic funds transfer (Seft) to coincide with onset of T+2 rolling cycle.

Rupee peaks anew

Even as shares floundered, the rupee marched to a new 18-and-half-month peak against the dollar. It closed at 47.48, up from last week’s 47.55.

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