Bearish mood may continue but reforms to boost market: Survey

The Economic Survey (2001-02) on Tuesday cautioned that bearish sentiments in stock markets would continue for some time but complimented the Indian bourses for showing resilience in the face of worldwide slowdown and terrorist attacks in US.

However, the domestic slowdown impacted primary market seriously with initial public offers contributing only six per cent of total resource mobilised in the market, the survey tabled in Parliament said.

"Stock market has been severely affected by developments in real sector. The deceleration has significantly reduced resource mobilisation from primary market through IPOs, which constituted less than 6.0 per cent of total mobilisation in the current fiscal," it said.

The survey also warned that fears concerning global slowdown persist, and the long and uncertain time lag for the monetary stimulus to facilitate economic revival in US may lengthen the shadow of bearish sentiments in the markets.

It, however, said ongoing reforms through introduction of rolling settlement, derivative products and revamping of the Unit Trust of India have "far-reaching" implications for the future.

Appreciating the "resilience" shown by Indian bourses after the panic created by terrorist attacks in US, it said "measures taken by the government and regulatory authorities augur well for facilitating the revival of stock market."

The pre-Budget document noted that "unhealthy links" among market intermediaries and private and cooperative banks, necessitated mandatory rolling settlement for active scrips and banning of deferral products.

PTI

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