BOMBAY, 11 July 2004 — As expected, this has been one of the most “happening” week for the Indian economy and the stock markets too. So much has happened that the marketmen and the analysts alike, had a tough time keeping track. First was the railway budget presented by the railway minister, Lalu Prasad Yadav. Then the Economic Survey was presented on Wednesday.
The market waited for the budget on Monday. Selling in blue chips resulted in the market losing ground after volatile trading. Banking stocks crashed following the RBI directive limiting investments by a single entity in the private banks to 10 percent.
The Sensex was ecstatic with the railway budget on Tuesday. The BSE closed at a four-week high of 4,929, gaining a whopping 85 points. On Wednesday the BSE was happy with the economic survey and ended with a modest gain of 27.38 points at 4,955.97.
The union budget for 2004-05 was finally presented on Thursday. Expectations were running very high and the markets had an extremely volatile day of trading. When Finance Minister P. Chidambaram started the speech, the market fell. With Chidambaram’s proposals to raise the FDI ceiling in telecom, insurance and civil aviation sectors, the Sensex crossed the 5,000-mark by noon.
This joy was short lived. Increase in excise duty on steel from eight percent to 12 percent and hike in service tax across the board from eight to 10 percent saw the markets paring the earlier gains. Steel stocks were all in negative territory.
Then Chidambaram gave the carrot of abolishing long-term capital gains tax for trading in securities. This was soon followed by a mighty stick with the announcement of a transaction tax of 0.15 percent. The BSE Sensex ended with a loss of 112.13 points at 4,843.84. And on Friday, the market recouped all the losses made on the previous day as investors made fresh purchases in equities. The BSE Sensex ended with a gain of 101.64 points at 4,945.48.
The coming week, the market is expected to be volatile.
US dollar against Indian rupee was at Rs.45.88, pound sterling at Rs.83.42, euro at Rs.56.64, UAE dirham at Rs.12.50, Kuwait dinar at Rs.152.93, Bahrain dinar at Rs.120.73, Saudi riyal at Rs.12.23, Qatar riyal at Rs.12.60 and Oman riyal at Rs.117.64.
