The saga of the Sensex

Utpal K Choudhary

The market started the year 2002 on an impressive bullish note though it failed to retain its buoyancy for long.

Eventually the year turned out to be quite painful for the stock market.

The recent rally, however, has helped the BSE Sensex end the year with a five per cent gain over last year. The index opened the very first day of the year 2002 at 3246 and with some degree of fluctuation it climbed up to the year's high of 3706 on 27 February.

The market was hoping for a great Union Budget for the year, perhaps.

Thus the Sensex gained around 14 per cent over two months - a great beginning indeed. But the Union Budget came a disappointment.

The increase in surcharge and adverse taxation on dividend income hammered down the market. Most of the actively traded stocks touched the lower limit of the circuit filter.

This was followed by a series of mishaps. The Nasdaq tumbled and then came the series of accounting scams.

All this shook the Indian bourses as investors refused to take long position owing to uncertainty all over.

The Indo-Pak boarder tension around May, the uncertainty in the divestments and reform process also played its role.

Added to this, the political tension in Gujarat and drought like situation during the month of Jun-July led markets to slip further.

The Sensex plummeted to the years low of 2834 on 28 October, losing 24 per cent from the years high. Thanks to the not-so-bad monsoon and improved sentiment on the bourses, the Sensex had gained around 20 per cent since then.

Looking at the technical aspects and the lower than average price/earnings of the Sensex, year 2003 should be better.

2002: The Year That Was

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