The Telegraph
Since 1st March, 1999
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Bush rhetoric numbs sensex

Mumbai, March 7: US President George W Bush’s tough rhetoric over Iraq today pushed stock prices down for the fifth consecutive day with the 30-share BSE sensetive index dipping to a calendar-year low of 3142.89 during intra-day trades.

Reflecting the bearish sentiment, the index opened at 3182.16, lower than Thursday’s close of 3190.35. It recovered marginally to close at 3153.06, thus ending with a loss of around 37.29 points.

Along with the war fears, there were other factors responsible for today’s negative sentiments.

A possibility of the Securities and Exchange Board of India (Sebi) barring trading by foreign institutional investors (FIIs) through the participatory note route has been a worrying factor for the past few days.

Coupled with this, the Maharashtra government’s move to hike stamp duty on non-delivery deals by 500 per cent from Rs 200 to Rs 1,000 per Rs 1 crore transactions effective from April 1 also spoiled the mood.

Brokers said that the cash and derivative segments, which contribute to nearly 85 per cent of the daily turnover, would be drastically affected by the stamp duty. The news led to huge offloading in technology counters where most speculative deals are undertaken.

Infosys Technologies dropped by close to 2 per cent to Rs 4,022.30 and Satyam Computer Services fell by around 3.5 per cent to Rs 205.60.

Market witnessed virtually an across-the-board selling pressure sans any buying support. Select gains in few old economy counters could not reverse the negative sentiment.

The equity markets have lost about 4 per cent this week. The volume of business in today’s trading was relatively low at Rs 1,002.20 crore against Rs 1,098.61 crore on Thursday.

The impact of a possible war was also witnessed in the forex and bond markets. In the forex market, the rupee came under pressure.

The Indian currency closed at Rs 47.6450/6550 per dollar, lower from Thursday’s finish of Rs 47.6250/6350 after dipping to intraday lows of Rs 47.6850/6950 as banks and corporate scramble to cover dollar positions.

Crude prices

World oil prices were firm on Friday as foreign ministers gathered to hear United Nations weapons inspector Hans Blix deliver a key report that could lead to war in the oil-rich West Asia.

Markets built on the half-dollar gains chalked up on Thursday when Bush accused Iraq of a “willful charade” and called for a new UN resolution within days to authorise disarming Iraq by force.

Brent crude futures for April stood six cents up at $ 33.59 a barrel while US light crude was unchanged at $ 37 a barrel. Analysts said markets were nervous ahead of the UN inspector’s report.

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