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Praveen Gurwani
Players expect markets to stabilise in 3 trading sessions
MARKETS BUREAU
MUMBAI, DEC 12: The 30–share index of the Bombay Stock Exchange (BSE) has once again proved that what goes up must come down. The Sensex dip continued on Tuesday. It shed 404.41 points or 3.02%, to close at 12,995.02 points.
Tuesday’s trigger was the announcement that India’s industrial production growth had slumped to a 10-month low in October. This piece of news led to the biggest fluctuation among equity markets.
Arun Kejriwal, director, KRIS, said, “Some position unwinding has attributed to the fall and the markets is expected to stabilise in the next two or three days. Investors were not prepared to book profits, with the expectations that the markets will continue its northward journey, and hence the sell off.”
According to market analysts, the correction during the last two trading sessions could be attributed to the weak trend that had already set in on Monday. This was coupled with the release of the Index of Industrial Production (IIP) numbers which further unnerved the already jittery sentiments of market players.
India’s industrial output growth was at 6.2% for the month of October 2006 compared to 9.8% for October 2005.
Ajay Bagga, CEO, Lotus India Asset Management Company, pointed out that fresh investors should stay on the sidelines and existing investors should stay invested even though the markets may slip further.
“Retail investors who have been waiting for the right opportunity to enter the market might still have to wait, as the market may continue it downslide by another 500 points. Also existing investors should not panic and stay invested as the fundamentals are good, and the January earnings are looking good too,” said Bagga. Pointing out that there were no fundamental reasons for the present correction, he attributed it to the recent hike in CRR rates by the RBI and the advance tax outflow
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