03 March, 2021

A Flash In The Pan?

Budget 99 sent the stockmarkets into a bull frenzy, but sentiments are bound to cool down in the longer term

A Flash In The Pan?

Even Yashwant Sinha must be a trifle taken aback at the stockmarket’s frenzied welcome to his second budget. In three days to March 3, rising share prices had added Rs 40,000 crore to total market capitalisation. And he must be awfully glad that the markets created history again in the ’90s. Post 1992, it was only the second time that the markets added 100 points each on those three consecutive days. For instance, even if you had 10 shares of Infosys on February 22, you could have made a cool Rs 85,000 had you sold them on March 3, brokerage not included.

Of course, hard-nosed punters knew that the good times would not last. The Sensex dropped 80 points on March 3 and 4 and closed Thursday at 3602. But it was only an expected technical correction, according to market circles, and the rally has probably settled down to a new level.

The cautious, though, are decidedly cool to the bull attack, which they say follows every budget. In 1997, for example, after Chidambaram’s "Dream Budget", the Sensex—which had dropped to...

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