A combination of factors together with looming election fears is impeding the stock market sentiment with investors ‘letting go' of the fundamentals in the shares, according to industry analysts. “With the government planning on November 15 to announce a date for both Presidential and general elections investors are adopting a wait-and-see approach and evaluating the situation, which is why the indices were partly down this week,” an analyst said. He said the volumes are small compared to previous trading weeks which were mainly due to low participation.
A stockbroker said that big investor Raj Rajaratnam’s issue as well as the GSP+ crisis is hampering the market sentiment in addition to the election fears. “It is more the Rajaratnam’s issue which has hit the share market. The market has increased so fast and so hard that the slightest negative information will bring it down,” he said.
Another broker said that if Rajaratnam sells the market will be excited, as there are many investors who want to by his stocks. “His stocks are illiquid. He does not trade actively. Therefore there are many buyers for his shares,” he said. He explained that as a result of this there will not be a major impact to the market.
He noted that technically also the market is indicating a slump, which has aggravated the situation. Some brokers say that election fears were factored in since June. “The indices decline is more to do with the third quarter results. The investors are awaiting this and will make a decision after that. They have adopted a wait-and-see approach due to this reason,” a broker said. |
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