Sensex on downturn

The bullish trend of the country's stock markets has taken a strong beating in recent sessions, beginning from the day the general budget was introduced on February 1. The BSE had registered a loss of 800 points on the day the general budget was introduced in the Parliament. For all reasons, the general budget is not a populist one, neither is it a reformist one. It lays emphasis on the farm sector, MSMEs and healthcare. The salaried class did not get any relief on income tax slabs. There was little in the budget for the big corporates or industries to cheer about. In such a situation, the stock markets usually continue with the status quo, but this did not quite happen in the case of the latest budget, as the stock markets have not improved their indices ever since the budget was introduced. Taking a cue from international equity markets, which are on a sell-off amid a low GDP rate and sluggish market sentiments in the respective markets, the Indian stock markets too continued with its bearish run for the sixth straight session as the BSE Sensex fell by over 1,200 points in the opening trade on Tuesday. Before the fall in the stock market indices, the sensitive indices of major stock markets in the country were showing robust gains, with the BSE Sensex crossing the psychological 35,000 points. The BSE Sensex opened at 1,250 points lower at 33,506 on Tuesday. Following sharp losses in other Asian markets, which followed a record-loss on Wall Street amid investor worries over rising US borrowing costs, the Indian markets took a beating. Apart from the bearish international trend, investors in the Indian stock markets are taking caution selling off their stocks ahead of the RBI policy meet that begins today. The RBI is expected to increase the repo rate amid inflation concerns. Repo rate is the rate at which the central bank lends money to commercial banks. The upcoming RBI monetary policy will be an important factor for the markets and this seems to have impacted the sentiment on the bourses. So far, the domestic markets have shown poor investor sentiments in the apprehension of the RBI monetary policy meeting. Owing to the apprehensions, the rupee dropped by 29 paise to 64.36 against the dollar on Tuesday. The general budget proposes to tax equities and this coupled with a global sell-off has weakened the market sentiments at Indian bourses, and that has led investors to lose nearly Rs 5 lakh crore in just two trading sessions. Finance and Revenue Secretary Hasmukh Adhia said, the local markets are aping global weakness, "but the government will look into what it can do." Stock market analysts maintained that the crash is not because of the economic policies of the government. It is when the stock market shows a bullish trend, the economic policies of the government are given the credit, not when it shows a bearish trend.