The Telegraph
Since 1st March, 1999
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Jaswant spread fails to whet market appetite

Mumbai, Feb. 3: Jaswant Singh left the markets high and dry with an interim budget that failed to slake the appetite for more condiments to spice up the stock feast.

Dalal Street greeted the announcements with a 75-point slide in the BSE sensex, which had shed 150 points at one stage during the course of trading this afternoon. The index settled at 5620.98 points and, though it has not been blazing through much of last week, bourses were awash in hopes of further propellers.

“Too much has been made of the vote-on-account. There has been a lot of hype created unnecessarily,” said Ashok Kumar, CEO of Lotus Strategic Consultants.

As the finance minister presented the interim budget in the Lok Sabha, share prices fell sharply after an initial upswing. The BSE sensex opened at 5715.46 points, fell to an intra-day low of 5550.17, before ending at 5620.98 against last Friday’s close of 5695.67, a net fall of 74.69 points or 1.31 per cent. NSE’s nifty lost almost 2.25 per cent at 1,769 points.

“After a long time, bears are calling the shots,” said Kumar. After touching an intra-day low of 5550.17, short-covering helped the sensex recoup some early losses. “There is a clear indication of a reversal. Investors are also withdrawing from the markets to invest in the slew of initial public offers to be floated soon,” Kumar said.

Motilal Oswal joint managing director Raamdeo Agarwal said it’s a correction. “It is a sentimental and conventional thing that markets expect a lot from the budget. We haven’t had much of a correction after the sensex ran up almost 3000 points to 6240.” The current trend might continue till the weak players quit.

In the run-up to the budget, there was growing speculation that that the government will raise exemptions on personal taxes in a bid to stoke the feel-good factor ahead of general elections. “There are many investors who are losing patience because of the high volatility in the markets and are opting out,” Kumar added.

Banking shares were among leading losers after the finance minister said banks have to lower interest rates on their loans to the farm sector by two percentage points below the prime lending rate.

State Bank of India lost Rs 26.10 to Rs 569.70, a loss of almost 4.4 per cent. Other bank shares also plummeted. Bank of Baroda lost 4.8 per cent to Rs 207.25, Bank of India fell 10.7 per cent to Rs 57.6 and Canara Bank dropped 10.94 per cent to Rs 121.35.

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