UPA govts selloff policy woes dent PSU shares

Mumbai, Oct 14 | Updated: Oct 15 2005, 06:28am hrs
Apprehensions that the Congress-led UPA may not further pursue the divestment of PSUs have continued to hit these stocks in the capital market. The BSE PSU shed 6.65% at 4888.12 points, while BSE Sensex lost 6.8% at 8201.73 points compared to October 4, when the indices touched all time high at 8800 points.

During the same period, other sectoral indices, BSE Bankex shed 9.28% at 4683.76 points, BSE Auto lost 6.87% at 3532.48 points, BSE IT shed 2.53% at 3175.82 points and BSE Teck lost 3.48% at 2134.02. Similarly, the BSE Mid-Cap shed 6.54% at 4021.52 points and BSE Small-Cap lost 8.34% at 5419.27 points.

An analyst from a domestic brokerage said after the government put the divestment of the Bharat Heavy Electricals Ltd (BHEL) on the back burner under pressure of Left parties, it has sent negative signals in the market for the PSU stocks. Investors preferred to cut exposure in these stocks.

JM Morgan, in its recent research report on Indian market has indicated the government may slow down the economic reforms as the state assembly elections would be held in Bihar in October this year and polls would take place in Tamil Nadu and West Bengal in mid next year.