Industry fears policy delays

Short covering at select counters coupled with attempts made by punters to liquidate their positions on Thursday made during the earlier phase of the session saw the NSE’s Nifty Index registering a loss of 18.95 points to close at 1,011.75 points. The BSE Sensitive Index closed lower at 3,527.10 points registering a decline of 35.27 points over its previous close.

“There were lot of short positions in the market which gave out indications that the market should go up, however, this being the necessary condition, hence the sentiments have been extremely bad,” commented Sandeep Shah of Kotak Securities.

"The dissolution and fresh elections would mean a period of uncertainty. A period when no policy decisions would be taken… the reform process will be at standstill. By the time a new government is installed, the current financial year will be over. The present conditions will make it worse as no new investments may come forth until the dust settles down," warned S D Kulkarni, MD and CEO of L&T.

"To tackle currency crisis and other economic issues, we need a strong government. Instead, we will have no government for the next few months… nobody expects a clear polarisation of political forces to take place and, no single party may be able to secure absolute majority to form a government. What will we achieve by going through the ordeal of another election at such a short interval?" Kulkarni asked.

"There was negative FII’s investment inflows in November. Without a new government in place, it will be difficult to restore the confidence of the international investor community," he said. K C Mehra, managing director, Forbes Gokak added that unless there is a stable government, no new projects will come up and foreign investment will go down.