Market volatile, nervousness likely to continue

PFW Bureau / Nov 24

The shadow of sub-prime phenomena, reports of a possible hike in the Securities Transaction Tax (STT) , nervousness of global market and profit booking by the investors were responsible for the volatility in the bourses throughout the week ended on November 23.

The Bombay Stock Exchange (BSE)’s Sensex shed 846 points or 4.2% to close at 18,852 points during the week between November 19 to 23. However, NSE’s Nifty ended flat during the said period.

According to the market analysts, the investors were apprehensive of the sustainability of the market. They preferred to book profits at the high level of the indices because the impact of the sub-prime crisis still continues to hound the global market. The global market was nervous due to some reasons too.

The reports of Union finance ministry planning to increase STT has witnessed selling pressures in both the leading bourses.

The sectoral indices of BSE – PSU, Bankex and Oil – were the major losers at the bourses. The BSE PSU shed 1,069 points or 10.1%, Bankex lost 589 points or 5.3% and Oil counter shed 492 points or 3.9% during the said period.

The volatility is expected to continue in the coming weeks too. The political climate is likely to hot up as the state Assembly poll in Gujarat is getting nearer.  

The triple bomb explosion killing more than 15 people in UP and the lingering of Nandigram issue may further polarise the political process leading to the weakening sentiments in the market.

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