Thursday and Friday saw fluctuations in the Indian stock market for the first time since New Year. The stocks had a dream run for the past few days, taking the index to pre-recession figures.
The major reasons for the slump are the imminent quarterly results of corporates and strengthening of rupee against a weak dollar. The most affected are the technology companies. A few banks and automobile shares are also among the wilted lot.
Thursday saw the Bombay Stock Exchange’s Sensitive Index fall 0.5% to close at 17,615, while National Stock Exchange’s Nifty fell by 0.35% to 5263.10.
Friday again was a day of volatile trading with Sensex closing 0.43% lower at 17540.29 and Nifty 0.35% less at 5244.75.
Infosys Technologies Ltd., the IT giant, led the losers, followed by its rival Tata Consultancy Services Ltd. Being software exporters, that too mostly to the US, IT companies suffered the most from the continuous gaining of the rupee against the dollar. A strong rupee will bring in less value to IT companies for overseas sales, when the earned dollars are converted into rupees.
The quarterly results of companies due in the coming days also seem to make investors a nervous bunch.
The slow and steady climb of the index since New Year was too good to last for long. A correction was overdue and that is just what is happening. The market might stay uneasy and fickle for a while before picking itself up once again.
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