FM warning against manipulators boosts market

FM warning against manipulators boosts market
ENS ECONOMIC BUREAU

Mumbai, Apr 3: Stern warning by Finance Minister Yashwant Sinha of action against manipulators led a marginal recovery on Dalal Street on Tuesday. The bellweather Sensex netted a gain of 38.75 points on the Bombay Stock Exchange (BSE) today following Sinha’s assurance to take firm action against market manipulators and reports of a major clean-up operation in the financial sector.

Heartened by Sinha’s reported statement that anyone found guilty of manipulating the market would not be spared coupled with reports of likely replacement of SEBI chairman D R Mehta, domestic operators and speculators returned to the ring either covering short positions or booking fresh orders. “The FM’s statement injected some confidence into the broking fraternity,” said a broker, adding, “I hope he will put into action what he promised.”

“I am not concerned by the ups and downs in the market. But I am disgusted by manipulations. I am determined not to spare anybody in RBI, SEBI, banks or the broker community who is found guilty,” Sinha had said on Monday. Fresh purchases, albeit in small quantity, by foreign institutional investors (FIIs) as well as local institutions further encouraged players. Sensex opened weak at 3543.82, later gradually improved rising to the intra-day high of 3619.62 in limited activity before closing at 3605.01 as against yesterday’s close of 3566.26, notching a gain of 38.75 points. The broad-based BSE-100 Index rose by 21.27 points to 1680.53 from previous close of 1659.26.

Depressed sentiment on the Wall Street, where the Nasdaq Composite Index dropped by about 57 points last night, was totally discounted by the market. As a special court is hearing bail plea of Bharat Shah, alleged financier of arrested big bull Ketan Parekh, speculations were rife on likelihood of his release and this had sentimental impact on the market.

Had it not been for stagnant heavyweights HLL, ITC and Infosys Technologies, Sensex would have been still better placed. All the three key index stocks closed almost steady. The volume of business which has been adversely affected since March 9 when SEBI banned short sales followed by imposition of hefty 25 per cent margins on net outstanding sales was very low at Rs 1015.80 crore. In the specified group, 131 counters including 25 index shares registered handsome gains while 44 others closed with moderate losses.