MUMBAI, May 11: The stock markets heaved a sigh of relief following the smooth passage of the Finance Bill in the Parliament.

With the tax reliefs announed in the Union budget now getting legalised, marketmen expect the corporate sector and the capital markets to benefit in the coming weeks.

However, this rosy scenario has been dampened by fears of immient petroleum price hike and discouraging corporate performance. As a result, the total outstanding carry-forward business dropped at the turn of the settlement. Besides, the political uncertainty at the centre in the wake of framing of charges by the CBI in the fodder scam involving heavyweights, forced operators and the broking fraternity to adopt a cautious approach in the coming days. Auto shares continued to drift amid disconcerting reports of slowdown in sales and decline in profit margins.

During the week, the BSE sensitive index showed a fall of 32.37 points in spite of sharp uptrend on several second rank shares including the bank scrips. The sensex closed the week at 3769.34 as against the last Friday's close of 3801.71. The BSE-100 index also dipped by 13.45 points to end the week at 1619.57 from 1633.02 in the last weekend.

The Bombay Stock Exchange commenced the week with a fall of 45 points in the sensex in the wake of heavy selling pressure induced by fears of a substantial hike in the prices of petroleum products. The selling was fuelled by Prime Minister I K Gujral's statement about an unavoidable price rise in petrol prices to meet the mounting oil pool account deficit. Marketmen were concerned about the petro price hike as it would have an adverse effect on all industries.

Operators had become increasingly unwilling to make fresh commitments as they were disappointed by lower than satisfactory performance by large corporate houses, mainly companies belonging to the Birla group. Century textiles shocked the market throughout the week. The company came out with a dismal performance with its net profit plunging by about 98 per cent to Rs 2.67 crore from Rs 194.75 crore. In spite of the proposed bonus issue in the ratio of 1:1 and maintaining the dividend, the scrip crashed from Rs 2600 to Rs 1830.

The market was also disappointed by the proposed bonus issue of 1:2 by Indian Rayon which reported excellent working results. The scrip slumped after crossing Rs 400 mark to Rs 352 on Friday. Local institutions preferred to wait and watch the political developments at the centre. But FIIs reportedly made fresh buying in several PSU shares and bank scrips. Petro shares also remained bullish on speculative support. Bank of India, which was listed at Rs 50.25 on Monday against the issue price of Rs 45, attracted brisk activity on heavy buying support. The scrip ended the week at Rs 73.85 in view of trading restrictions. Marketmen expect a huge auction in BoI shares as most of the operators who were short in the counter were unable to deliver shares.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.