Fiscal-end blues takes a toll on equity markets

Mumbai, March 22 | Updated: Mar 23 2005, 05:54am hrs
More bad news is in store for the stock markets that are already on a downswing for the last few sessions. Market players are awaiting a fresh trigger to lift the sentiments but history shows that the last week of March has seldom been good to the equity markets.

In the last five years, both the benchmark indices, the Sensex and Nifty, have witnessed a fall in the last seven trading sessions of March every year since 2000 except 2004.

It is true that March is bad for the bourses. The financial year nears its close and investors not keen to disclose their exposure to equities embark on a selling spree. Also, liquid cash is needed to fulfill advance tax payment obligations which further added to the selling pressures, market players noted.

Sharad Shukla, head (PMS), IL&FS Investsmart, said, The financial year is nearing completion and many people dont like to show equity in their books which leads to widespread selling activity in the market.

The highest fall in percentage terms in the last week of March was witnessed in 2003 when the Sensex and Nifty closed at 3.048.72 and 978.20, respectively, registering a fall in excess of 5% each. In 2002, the Sensex and Nifty shed 3.13% and 2.3%, respectively, while 2001 saw the Sensex and Nifty moving down nearly 3%.

Similarly, in 2000, Sensex and Nifty registered a fall of 2.2% and 1.6% in the last seven trading sessions of March. The only exception was 2004, when both the bourses witnessed a rise of 3.5% and 4.5%, respectively in the last week of March.