STOCK MARKETS-On the Wrong Track

facility of broad-banding has been introduced to allow them to make rapid changes in their product-mix without seeking fresh licences. A scheme of re- endorsement of capacity has been made available to all licensed units which achieve 80 per cent of their licensed capacity during any of the previous five BUSINESS STOCK MARKETS On the Wrong Track THE special 'moorat' session in the major stock exchanges on October 22 ushering in the new Samvat year (2044) turned out to be an altogether unexciting affair. The markets did wear a festive look but even a casual observer could not have failed to notice the lack of gaiety associated with the festival of lights. Relaxation of curbs on trading in specified scrips stipulated by the Dave committee under phase I which came into effect with the commencement of 'moorat' trading could not impart any liveliness to the market. Participation by the outside public as also by institutional investors was said to be confined to token ceremonial orders. Professional operators also preferred to maintain a low profile because of the limited scope for 'free trading' in specified scrips under the new dispensation. Equity prices, however, registered widespread losses under pressure of light offerings and lack of fresh support, with the Bombay stock exchange sensitive index for equities down by about 2 per cent from its previous closing mark. Inferences drawn from one day's movements in equity prices can be very misleading, unless, of course, these have been induced by some very far reaching events, including specific corporate news. One could say that the subdued tone displayed by the markets during the special 'moorat' session reflected their concern over the biggest-ever crash in Wall Street and in other major markets the world over. But factors influencing the course of equity prices here and abroad are altogether different; in any case, Indian markets are almost completely insulated from happenings in stock markets abroad. It would also appear rash to interpret the stock markets' performance during the 'moorat' session, characterised by poor turnover and the slide-down in prices, as an indication of its profound assessment of the outlook for equities in the new Samvat year. That the economic prospect is far from reassuring may, however, be readily conceded. The drought is likely to have a significant impact on the economic tempo.