Downtrend on Lyons Range

By A Special Correspondent

CALCUTTA, AUG. 6. The expectations of most marketmen that the worst is over in the bourses of the country and that a strong recovery trend is round the corner has been belied as reflected by the performance of the Calcutta Stock Exchange last week with share prices once again falling sharply with software group in the forefront. An exception was the cement counters which wound up higher on balance because of an earlier rally aided by brisk support. But even in their case, the gains could not be fully retained because of profit booking induced by the sharp decline elsewhere in the list. The business volume was low for most part of the week but fair on Friday when there was some amount of panic selling.

The representative indices also failed to maintain the recovery trend and the close was below the best. For instance, the CSE's 40-share index after rallying to 2009.20 points from 1985.34 points reversed to close at 1990.90 points. The improvement in the index was helped primarily by the increase in cements and shares of fast moving consumer products manufacturers.

The panic selling that was in evidence at one stage during the week was let off by weaker advices from Mumbai where too prices fell sharply led by the infotech group which bore the brunt of the pressure.

According to a leading operator in Calcutta, while all weak holders had been eliminated from the market in the course of selling pressure in the previous weeks, the stronger holders too joined the band wagon during the week under review. Now only the strongest is holding on to their oppositions. This turn in the market came about partly because of the total absence of buyers, especially the main supporters such as foreign institutional investors and leading domestic institutions. This state of affairs forced the vulnerable holders to unload swiftly their holdings.

Sources said that this was primarily the cause of the fall in prices. They, however, hold the view that the remaining holders are too strong to be panicked easily. Chances, therefore, of a new recovery effort in the near term looked bright.

However, since the stock market behaviour does not respond to any logic, local or international, the only option is to wait and watch. Next week might throw some light into what is in store for the investors in the stock market.

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Section  : Business
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