Investor sentiment may take a knock.

>> Friday, November 28, 2008

Wednesday’s terrorist attack that rocked the financial capital of the country could further dampen investor sentiment already shattered by the credit crisis, say analysts and marketmen.

However, most of them do not expect a sharp fall in key indices.

“There might be a knee-jerk reaction in the market when it opens”, said Mr Manish Sonthalia, Vice-President, Equity Strategy, Motilal Oswal Financial Services Ltd.

Both Bombay Stock Exchange and National Stock Exchange were officially closed on Thursday following the terror attack.

“I don’t see a great impact tomorrow on markets,” said Mr U. K. Sinha, Chairman & Managing Director of UTI AMC. In the past also such developments had only a temporary impact on trading, he said.

Both BSE and NSE said that the expiry in futures and options, and settlement due on Thursday, were postponed to Friday.

The Singapore Nifty Index Futures opened a little lower than the previous close and ended lower by 64 points.

The terror attack as such is not going to impact the market but will have sentimental impact and foreigners may defer their investment plans, said Mr Dinesh Thakkar, CMD of Angel Broking Ltd.

Some analsyts feel that in the event of a market crash, domestic institutions such as LIC might come to the rescue, said the head of research at a broking firm.

On Tuesday, Sensex ended higher by 331.19 points at 9026.72.

Downgrade seen

As foreign tourists were held captive in top hotels, there might be a downgrade on the big and reputed names in the hotel industry, said Ms Anita Gandhi, Head of Institutional Business, Arihant Capital Markets Ltd.

The terror attack is bound to create a panic amongst the foreign investors which in turn could impact foreign direct and institutional investments.

The US traded shares of Indian companies were up on Wednesday. ICICI bank was up by 1.8 per cent, Infosys by 6 per cent, MTNL by 3.1 per cent and Wipro by 3.8 per cent.

Meanwhile, the SEBI board, scheduled to meet tomorrow, is expected to consider, among others, the exit route for regional stock exchanges and guidelines for separate exchanges for small and medium enterprises.

The equity, currency, bonds and money markets were officially closed on Thursday.

Source - TheHinduBusinessLine.