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False Alarms

False Alarms Nishtar THE stock market has still to recover from the budgetary chill. The mid-week rally induced essentially by technical considerations has been too feeble to make any impact on market sentiment which remains unsettled because of the adverse criticism of the budget proposals, it is said that tin; budget is not growth-oriented and that it will generate a new round of tax-induced inflation. It is argued that the increase in personal taxation will reduce savings in the hands of the people and act as a serious deferrent to further investment and that the larger burden on the corporate sector will vitiate the climate for new investment and would affect capital formation and slow down the rate of industrial growth. The threatened withdrawal of the development rebate alter May 1971 has come in for sharp criticism. It is argued that since it takes a long time for an industrial licence to fructify, the proposed abolition of development rebate will lead to deceleration of project planning activity. It would thus not only act as a future deterrent but also prove a current deterrent to economic growth.

Delayed Reaction

Delayed Reaction Nishtar THE stock market has set its sights lower. The mood of cautious optimism discernible on the eve of the general budget has given way to a feeling of disappointment, Pre-budget optimism was attributable partly to the not-so- harsh hike in railway freight rates and passenger fares and partly to the optimistic tone of the Economic Survey certifying that the economy which had given a "generally satisfactory" performance in 1970-71 was better poised to tackle the formidable problems con- fronting it. Even though its expectations of a saving and investment oriented budget had been belied, the market presented a fairly steady front during the special budget session on Friday evening. It seemed to take comfort in the thought that the Finance Minister could have easily assumed a more radical posture in evolving his fiscal strategy.

Further Retreat

Further Retreat THE stock market continued to wear an uneasy look throughout the week and it was forced to beat a further retreat under pressure of light but persistent selling. Despite a modest rally near the weekend, net changes over the week showed widespread losses. Activity, however, was on a considerably reduced scale as operators preferred to mark time in view of the proximity of the Central budget.

Avoiding the Net

Avoiding the Net? Nishtar THE stock market seems to have developed symptoms of mild 'budgetitis.' The mood of cautious optimism has given way to a feeling of uneasiness. After inching its way very close to its January high mark, the market hesitated for a while and later retreated under pressure of precautionary bull liquidation and modest bear selling, induced mainly by tax fears. Most counters have closed around the lowest levels of the week. But losses, though widespread, have generally been confined within a narrow range.

Hesitant but Upward Inclined

Hesitant but Upward Inclined Nishtar THE stock market simply idled away its time last week. Instead of moving up and down, it drifted sideways at a slow pace. Interest tended to be extremely selective. Over the weekend, gains outnumbered losses but excepting a few isolated counters, net changes were confined within a narrow range. The mid- April high mark has not been touched again but the market has not moved much away from it either; it has kept very close to it all the time.

Rap from Government

Rap from Government Nishtar THE stock market has been marking time recently, moving up and down in a leisurely manner. By April 17, the market had moved so very close to the year's highest level recorded in January that it was almost inevitable that it should pause to allow technical forces have their play before taking its next important step. However, despite considerable corrective profit-taking, the market has staged only a modest retreat. Selling has been easily absorbed due to a number of bull factors. The corporate news in particular has been very favourable. Quite a large number of companies which have released their results recently have gladdened the hearts of their shareholders through larger profits, higher dividends and bonus issues. Thanks to the return flow of funds and spurt in deposits, conditions in the short-term money market have improved perceptibly. The interbank call rate has come down to 6 per cent and banks have effected a substantial reduction in their borrowings from the Reserve Bank. This has naturally raised expectations of a liberalised credit policy. Reports from New Delhi indicate that the Government is inclined to implement the licensing policy in a flexible manner with a view to stimulating industrial growth. Recent export trends have also been encouraging.

The Mood Changes

The Mood Changes Nishtar THE stock market presented an altogether different look last week. There was no trace of the uneasiness which had been in evidence for some time, reflecting tax fears and deep concern over the possible consequences of a prolonged civil war in East Pakistan. The market was again a picture of confidence, and it took a big leap forward which carried it fairly close to the highest level reached earlier this year. Several factors contributed in varying measure to the marked change in sentiment.

Indecisive Mood

Indecisive Mood Nishtar THE stock market's performance last week was not much different from that in the preceding week. Despite the somewhat improved tone at the weekend, the market continued to present an uneasy look. There was no dearth of news, good as well as bad. But the market was in no responsive mood. Bullish news produced little buying and bearish news caused no big selling. With tragic events in East Pakistan weighing heavily on their minds, operators continued to remain on the sidelines. Equity prices moved up and down

Tax Worries

Tax Worries Nishtar THE stock market has relapsed into an uneasy mood. Little buying, not much selling anil subdued tone

Suspense to Continue

Suspense to Continue Nishtar THE stock market has been unable to improve upon its previous week's high and, instead, it has staged a precautionary retreat. Bullish fervour generated by the prospect of a stable and firm government at the Centre has cooled down. The market has done well in not allowing wishful thinking to colour its judgment. While it is reasonable to expect that the new government will be able to deal more effectively with the disturbing law and order situation and that this will have a favourable impact on the investment climate, the market has to reckon with a number of factors and not all of them are likely to be to its liking.

No Bull Campaign Till Budget

No Bull Campaign Till Budget Nishtar THE prolonged spell of uneasiness is over. With the mist of political uncertainty cleared, the stock market has taken a decisive turn for the better. The prospect of a stable and firm government at the Centre has injected new life but the market has not allowed itself to be carried away by impulse. It has pushed its way up without up spectacular dash. The market has every reason to feel pleased with the decisive victory of the ruling Congress party as this will strengthen the government's hands in dealing effectively with the forces of disruption and enable it to go ahead more purposefully with the programme of national reconstruction. Indira Gandhi has been quick to reassure that her party will strive to increase production both in agriculture and industry to combat unemployment and check inflationary pressures. Deeply concerned over the big shortfall of about Rs 165 crores in the Centre's Plan expenditure this year, Indira Gandhi has called upon top secretaries of the Central Government to show more dynamism in implementing Plan projects.

Not for a Rise, Anyway

Not for a Rise, Anyway Nishtar THE stock market simply marked time last week, moving to and fro in an indecisive manner. It beat no further retreat, but it made no attempt to move up either Activity shrank further, and much of this limited business was precautionary trimming of outstanding positions on the eve of the parliamentary elections. Net changes over the week showed a mixed price pattern, with plus and minus signs almost evenly spread out. Only the shares of companies engaged in the manufacture of rayon tyre cord yarn (Century Rayon, National Rayon and the DCM subsidiary Sri Ram Rayon) have had a rather bad knock as the cut in tyre cord prices is likely to make a quite big dent in their profits.

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