ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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STOCK MARKET-Misdirected Government Intervention

STOCK MARKET Misdirected Government Intervention THE Bombay stock exchange, the country's premier institution accounting for nearly two-thirds of the total turnover in all the stock exchanges, has, of late, been having an uneasy time. It is not because of the downward drift in equity prices but because of the continuing shrinkage in turnover. Between August 13 and September 25, the market has retraced almost half of the rise in the preceding impressive recovery from the June 22/23 lows induced mainly by sustained institutional support in a big way. But the fall or rise in equity prices is not really of much consequence to the stockbroking community unless, of course, it results in serious payments difficulties. The turnover, however, has a direct bearing on its private fortunes. And the turnover has shrunk very substantially. The average monthly turnover on the Bombay stock exchange during the first eight months of this year (January-August) is placed around Rs 800 crore and the average for July-August is much lower around Rs 570 crore which is almost half of the average monthly turnover of Rs 1,133 crore in 1986. The turnover figure for July-August would have been still lower but for the phenomenal upsurge in speculative activity in cash scrips. The marked decline in the volume of business is attributable to various curbs on trading in specified scrips and the complete ban on forward deals since June.

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