Return
to Story Page
To print: Select File and then Print from your
browser's menu
Nalini D'Spuza
Mumbai, April 26: It's not the numbers, but the month which will determine the course of the market now. If it's June, the downside for the Sensex is limited and, the BJP's chances are brighter. This is the consensus of a cross-section of brokers interviewed by The Financial Express soon after the announcement of dissolution of the Lok Sabha.
Brokers feel that if the elections are held in June, the BJP's chances are better and the Sensex would bottom out at current levels. But if the elections are held in August/September, the sensex could see a further fall. The reason: the chances of BJP cashing in on the perceived sympathy will be watered down.
In the short-term, Ambareesh Baliga of Kotak Securities links the market outlook to the date of the elections. ``If the elections are held in June, the correction witnessed today has more or less provided a new bottom for the index. Even if some more selling follows we should see the index finding support at 3,200 levels.'' The fall in the index on Monday was largely operator driven. ``A consensus seems to have been built that if the elections are held in the near future BJP would win with a strong majority.''
However, if elections are held after the monsoons, the index should see a further sell off and the support level could be at 3,000 levels. Alok Churiwala director Churiwala Securities who does not see anything fundamentally wrong with the markets says: ``We have been living under the clouds of political uncertainity and financial crisis for a long time now. If the elections are held before the monsoons the markets should hold on to 3,100 levels. If the elections are postponed the index is bound to dip to a low of 2,800 levels.''
Maulik Sharedalal director Kaji & Maulik Securities agrees on the importance of timing of the elections. ``A date some time in August to September would be a fresh disappointment for the market and could push the Sensex down to the 3,155-levels. A date sometime in June could facilitate the Sensex bottoming out a little above that level.'' The short-term, however, looks grim. Ramesh M Damani, director BSE points to a bottom of 3050 for the sensex. He prefers to wait and watch with attention focused on FII activity.
``FIIs and institutional players have not yet started selling. If they turn net sellers we would face a considerable erosion in the index value.'' Motilal Oswal, director Motilal Oswal Securities, sees the market holding in the medium term. ``While everything is now centred around political developments it is difficult to predict on the index. However, the market is offering ample opportunities to pick value stocks.''
Bharat Dalal of Sanat Dalal Securities looks at the possibility of FII selling coming up. ``If they (the FIIs) prefer to withdraw funds from India and park their investible funds in other south-east Asian markets like Korea and Singapore the index should dip to a low of 2,700-2,800 levels. However, if the elections are held in June we should see the index bottoming around 3,000 levels.''
Dilip Bhat, BSE broker, Network Investments and Finance says if the elections are in June then the markets have more or less bottomed out at current levels or a shave off of another 50 points is expected. ``But, if the elections are in September, then the markets can fall by another 100-50 points. It all depends on the period of uncertainty which if lengthened by 4-5 months will lead the the markets to seek lower limits.''
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
------------------------------------------------------------
This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
------------------------------------------------------------