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Krishnan Thiagarajan

THE Ministerial chorus against the disinvestment exercise and the crucial meeting of the Cabinet Committee on Disinvestment to decide on the HPCL and BPCL disinvestment on September 7 have kept the markets on a tight leash. To add to the uncertainty, the preliminary attacks by the US on Iraq air bases and the possibility of an escalation of tensions in the region contributed to bearish sentiment in the markets on Friday.

The BSE Sensex declined by 40.12 points (or 1.26 per cent) to close for the week at 3141.11 points. Actually, most of the losses for the week were attributable to Friday's trading alone, when the markets declined by 40.36 per cent on the growing fears of a massive US-led assault against Iraq and the outcome of the crucial disinvestment meeting. The massive selling in Sensex heavyweights led to the slide in the markets. Effectively, the UTI bailout package which was expected to provide the stimulus to the market were blown away by these events.

The week was clearly dominated by the disinvestment in BPCL and HPCL and the wrangle over the strategic intent of the disinvestment put pressure on both the stocks which declined during the course of the week. In addition, the aluminium major Nalco's stock also witnessed panic selling on news that one of the Minister connected to the mining sector was not in favour of the disinvestment. This was a major setback given the fact that it was only recently that the expression of interest was floated by the Government for Nalco and it appeared to be on track for disinvestment. And to top it all, the possibility of a merger between Bharat Sanchar Nigam and Mahanagar Telephone Nigam (MTNL) as indicated by the Communications Minister led to bearish sentiment gripping the MTNL stock, which declined by over 10 per cent during the week.

For the frontline stocks in the software services sector, it turned out to an indifferent week. Both Infosys and Wipro declined during the week. However, among second-rung stocks, the major gainers were Mastek, I-Flex Solutions and Hexaware Technologies. Mastek gained following the setting up of its software centre at Millennium Park and its proposal to enhance its head count by nearly 600 people to achieve its revenue target of nearly 50 percent. Both I-Flex Solutions and Hexaware marched up on substantial orders bagged by both the companies.

International markets: As positive news started trickling in from the employment market in the US, the Dow Jones Industrial Average received the necessary pep towards the end of the week. But for the week, Dow closed lower by 2.7 per cent at 8427.70 points.

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