TRENDS IN SECONDARY MARKET

Index Movement

The share prices experienced a volatile trend during April 1999 due to uncertainty in political developments. As compared to the previous month, the stock prices declined on alternative bouts of buying and selling by the operators, but there was no panic in the market. The BSE Sensex opened at 3750.2 on April 1, 1999 and was at 3686.3 on the close of the day.

The BSE Sensex opened at 3750.2 on April 1, 1999 and touched the highest of 3754.7 on the same day before closing at 3686.3. Over the month under review, the BSE Sensex declined by 9.8 per cent, from 3686.3 on April 1, 1999 to 3325.7 on April 29, 1999. The BSE National index, however, suffered a larger fall of 11.3 per cent inspite of representation of a large number of companies in the index, S&P CNX Nifty fell by 8 per cent over the month. The decline was substantially higher in case of Jr. Nifty at 12.7 per cent.

Chart 4: Movement of Major Indices

The market passed through a highly volatile phase as market operators tried to square up their positions by off-loading several stocks. As a result, co-efficient of volatility of stock prices was markedly higher during April 1999 as compared to the previous month on account of the reasons cited above. The BSE Sensex witnessed a higher volatility of 3.30 per cent in April 1999 as against 1.83 per cent in March 1999. The volatility was higher at 3.79 per cent in case of Natex and 5.30 per cent in case of Jr. Nifty than that noticed in March 1999. Moreover, Jr. Nifty showed higher volatility than other indices.

Ratio Analysis (Price Earning Ratio)

The price-earning ratio reflected declining trend during the month under review. Price earning
 
P/E Ratio
No. of Companies
 
Forward
Others
Total
<5
52
822
874
>5 and <10
70
227
297
>10
148
233
381

(P/E) ratio of Sensex which was at 14.6 per cent on April 1, 1999 declined to 13.5 per cent by April 29, 1999. The P/E ratio of BSE 100 showed similar trend but was lower than that of Sensex. The P/E ratio moved in tandem with index of equity prices. However, the yield on equity marginally increased from 1.55 per cent by April 1, 1999 to 1.68 per cent on April 29, 1999 in case of BSE Sensex. On the other hand price to book value declined from 2.7 per cent on April 1, 1999 to 2.5 on April 29, 1999 reflecting discounting of the capital.

Chart 5: Volatility of Major Indices


 
Month Sensex Natex S&P CNX Nifty CNX Junior Nifty
Jan-98
4.83
4.74
4.67
4.02
Feb-98
2.62
2.70
2.97
3.98
Mar-98
2.30
2.60
2.02
4.03
Apr-98
2.17
2.36
1.96
6.04
May-98
3.24
2.93
3.09
2.93
June-98
5.26
5.92
5.11
7.72
July-98
3.45
3.25
3.12
3.89
August-98
2.66
2.26
2.57
1.84
Sept-98
3.21
2.91
3.10
2.16
Oct-98
1.93
1.89
1.81
2.54
Nov-98
2.60
2.48
2.58
1.98
Dec-98
2.85
2.93
2.69
3.10
Jan-99
2.87
2.84
2.91
3.15
Feb-99
1.70
1.87
1.79
2.89
Mar-99
1.83
1.67
1.53
2.74
Apr-99
3.30
3.79
3.31
5.30


 

International Comparison of volatility

The graph of volatility for various countries shows that Indian stock market witnessed the lowest volatility compared to Asian countries (such as South Korea, Hong Kong, Malaysia, Taiwan, Indonesia, Philippines and Japan) and US stock market. The volatility has become an endemic feature of stock markets but Indian markets have shown steadiness except for a few intermittent periods. Over the period April – March, variation in equity prices have been relatively lower than observed in other countries.
 
Date
Open
High
Low
Close
PE Ratio
PB Ratio
Yield (%)
1-Apr-99
3750.2
3754.7
3684.2
3686.3
14.6
2.7
1.55
5-Apr-99
3625.2
3625.2
3499.8
3519.4
13.9
2.58
1.63
6-Apr-99
3478.1
3569.9
3462.4
3569.5
14.1
2.61
1.6
7-Apr-99
3575
3624.6
3562.7
3586.8
14.2
2.63
1.6
8-Apr-99
3582.4
3606.8
3523.8
3538.2
14
2.59
1.62
9-Apr-99
3543.2
3543.2
3423.8
3441.2
13.6
2.52
1.66
12-Apr-99
3437.1
3469.4
3381.3
3463.8
13.7
2.54
1.65
13-Apr-99
3445.8
3485.7
3437.6
3464.5
13.7
2.54
1.65
15-Apr-99
3363.9
3403.3
3342.7
3357.1
13.3
2.46
1.71
16-Apr-99
3371
3584.6
3348.6
3572.9
14.2
2.62
1.6
17-Apr-99
3694.1
3709.6
3295.7
3327
13.2
2.44
1.72
19-Apr-99
3331.7
3468.1
3320.6
3451.4
13.7
2.53
1.66
20-Apr-99
3459.8
3479.2
3406.7
3444
13.6
2.52
1.66
21-Apr-99
3438
3483.8
3436.7
3464.5
14.1
2.6
1.61
22-Apr-99
3463.1
3516.3
3375.1
3408.7
13.8
2.56
1.64
23-Apr-99
3421.9
3449.2
3361.1
3406.6
13.8
2.56
1.64
26-Apr-99
3296.2
3322.9
3239.5
3245.3
13.2
2.44
1.72
28-Apr-99
3239.1
3285.4
3183.5
3272.7
13.3
2.46
1.71
29-Apr-99
3292.5
3351.9
3287.2
3325.7
13.5
2.5
1.68

 
Date
Open
High
Low
Close
PE Ratio
PB Ratio
Yield (%)
1-Apr-99
1658.2
1659.3
1628.8
1633.9
14
1.94
1.7
5-Apr-99
1612.2
1612.2
1552.4
1559.8
13.4
1.85
1.78
6-Apr-99
1544.4
1568.8
1522.5
1567.5
13.4
1.86
1.77
7-Apr-99
1568.9
1588.7
1565.9
1574
13.5
1.87
1.77
8-Apr-99
1571.5
1578.7
1547.1
1555.1
13.3
1.84
1.79
9-Apr-99
1555.5
1555.5
1505.3
1510.8
13
1.79
1.84
12-Apr-99
1510.9
1521.5
1482.4
1515.5
13
1.8
1.83
13-Apr-99
1509.7
1517.2
1501.5
1508.4
12.9
1.79
1.84
15-Apr-99
1471.7
1478.3
1451.9
1458.9
12.5
1.73
1.9
16-Apr-99
1461.9
1549
1449.8
1547.2
13.3
1.83
1.8
17-Apr-99
1591.3
1609.1
1431.5
1444.6
12.4
1.71
1.92
19-Apr-99
1443.8
1503.4
1440.1
1495.9
12.8
1.77
1.86
20-Apr-99
1498.3
1509.7
1482.8
1496.4
12.9
1.77
1.86
21-Apr-99
1496.6
1516.4
1496.6
1511
13.2
1.82
1.81
22-Apr-99
1511.9
1531.6
1474.5
1489
13
1.79
1.84
23-Apr-99
1494.1
1503.6
1466.1
1481.9
12.9
1.78
1.85
26-Apr-99
1446.6
1446.6
1406.1
1408.8
12.3
1.7
1.94
28-Apr-99
1406.7
1425.9
1379.7
1421.9
12.4
1.71
1.92
29-Apr-99
1428.3
1460.6
1428.3
1449.6
12.7
1.75
1.89

 
Date
Open
High
Low
Close
H-L Variation %
1-Apr-99
1082.55
1084.05
1062.45
1063.45
2.03
5-Apr-99
1030.65
1036.45
1008.35
1011.40
2.79
6-Apr-99
999.80
1025.95
993.00
1024.20
3.32
7-Apr-99
1027.35
1043.40
1027.00
1031.05
1.60
8-Apr-99
1033.00
1036.95
1015.30
1020.35
2.13
9-Apr-99
1021.55
1022.15
989.75
993.40
3.27
12-Apr-99
984.55
999.65
972.70
998.20
2.77
13-Apr-99
991.05
1006.15
989.90
994.25
1.64
15-Apr-99
968.40
980.65
964.35
968.60
1.69
16-Apr-99
970.95
1044.85
965.15
1044.45
8.26
17-Apr-99
1065.50
1069.55
961.40
966.95
11.25
19-Apr-99
961.30
1000.60
955.75
993.90
4.69
20-Apr-99
995.65
1003.70
983.70
995.40
2.03
21-Apr-99
997.35
1003.40
990.95
996.65
1.26
22-Apr-99
999.55
1012.00
971.90
981.65
4.13
23-Apr-99
987.05
994.30
968.15
982.00
2.70
26-Apr-99
945.90
955.50
931.30
931.35
2.60
28-Apr-99
928.85
944.45
916.00
943.50
3.11
29-Apr-99
950.25
966.60
948.40
966.60
1.92
30-Apr-99
970.90
980.75
969.60
978.20
1.15
Date
Open
High
Low
Close
H-L Variation %
1-Apr-99
2099.75
2103.15
2050.05
2071.90
2.59
5-Apr-99
2015.30
2021.00
1950.25
1954.45
3.63
6-Apr-99
1913.45
1956.35
1889.05
1951.20
3.56
7-Apr-99
1971.25
2001.05
1960.75
1962.70
2.06
8-Apr-99
1967.75
1971.75
1921.65
1933.25
2.61
9-Apr-99
1932.35
1933.90
1860.35
1870.20
3.95
12-Apr-99
1849.70
1887.10
1812.90
1874.25
4.09
13-Apr-99
1860.05
1876.75
1844.95
1847.95
1.72
15-Apr-99
1795.15
1810.85
1770.65
1776.75
2.27
16-Apr-99
1760.40
1903.65
1742.45
1897.05
9.25
17-Apr-99
1960.05
1960.20
1747.15
1752.85
12.19
19-Apr-99
1721.50
1793.15
1709.85
1782.30
4.87
20-Apr-99
1780.30
1803.85
1770.45
1803.60
1.89
21-Apr-99
1824.05
1850.40
1816.85
1841.55
1.85
22-Apr-99
1841.25
1860.20
1785.55
1806.45
4.18
23-Apr-99
1810.05
1824.70
1768.10
1789.30
3.20
26-Apr-99
1705.95
1711.55
1675.25
1683.50
2.17
28-Apr-99
1668.45
1714.30
1631.90
1713.05
5.05
29-Apr-99
1728.30
1773.25
1723.60
1772.70
2.88
30-Apr-99
1791.95
1816.05
1787.85
1809.00
1.58

Deliveries and Turnover

The daily turnover witnessed a sharp decline on both BSE and NSE during the month under review. The turnover in respect of group ‘A’ shares on BSE was Rs. 1552.82 crore on April 1, 1999 and reached its peak of Rs.1990.27 crore on April 17, 1999 but declined gradually to Rs. 964.86 crore by April 29, 1999. In case of B1 scrips and B2 scrips also the daily turnover showed a continuous decrease by and large due to climbing down of stocks prices. Daily turnover on NSE after moving either way till April 17, 1999 fell continuously to Rs. 1559.64 crore by the end of the month. The downward movement in daily turnover during the month under review, however, would imply reduction in trading activity as well as fall in the value of shares.
 
BSE
NSE
Date
A
B1
B2
F1
Demat
Total

A+B1+B2+F1+D
Total
1-Apr-99
1552.82
146.43
24.24
0.61
6.90
.00
2389.76
5-Apr-99
1424.41
118.00
15.63
0.39
1.20
1876.73
6-Apr-99
1606.90
202.75
12.20
0.14
7.77
2263.10
7-Apr-99
1580.31
184.55
11.94
0.20
2.94
2427.74
8-Apr-99
965.50
124.21
16.65
0.78
2.87
1601.86
9-Apr-99
1395.55
124.88
11.39
0.56
4.67
1843.76
12-Apr-99
1172.07
151.34
7.59
0.19
1.36
1757.89
13-Apr-99
1284.14
141.63
12.67
0.38
4.24
1906.36
15-Apr-99
1145.62
73.55
8.13
0.35
0.23
1623.60
16-Apr-99
1202.97
105.17
9.51
0.30
0.00
1637.24
17-Apr-99
1990.27
124.44
24.75
0.15
0.18
2609.50
19-Apr-99
1180.73
109.47
12.21
1.89
1.49
1477.69
20-Apr-99
1194.37
141.48
17.54
0.16
6.01
1510.12
21-Apr-99
1003.09
152.31
11.69
0.27
10.26
1448.32
22-Apr-99
1191.30
120.96
18.63
0.40
6.83
1700.32
23-Apr-99
1308.20
116.66
15.10
0.69
3.32
1793.04
26-Apr-99
1101.44
53.47
15.12
0.20
0.24
1219.17
28-Apr-99
1070.30
65.63
7.15
0.13
7.25
1494.72
29-Apr-99
964.86
70.64
6.58
0.20
3.87
1792.83
30-Apr-99
-
-
-
-
-
-
1559.64
Month
Index
Price to Book Ratio
Price to Earnings Ratio

(in per cent)
Average Daily Turnover

(Rs in crore)
Market-capitalisation

(Rs in crore)
Sensex
Nifty
Natex
Sensex
Natex
Sensex
Natex
NSE
BSE
All India
1998
January
3224.36
963.45
1401.38
2.21
1.46
12.79
11.34
1244
869.03
494224
February
3622.22
1060.75
1568.83
2.48
1.63
14.49
12.84
1189
868.25
554060
March
3892.75
1116.90
1697.14
2.68
1.78
15.65
14.04
1460
1110.00
589816
April
4006.81
1159.35
1760.96
2.76
1.84
16.11
14.46
1634
1404.41
610777
May
3686.39
1063.15
1644.14
2.54
1.72
14.84
13.50
1792
1302.22
591420
June
3250.69
941.65
1427.23
2.22
1.49
12.94
11.63
1343
1022.53
511012
July
3211.31
931.40
1416.67
2.18
1.47
12.69
11.48
1284
923.55
508863
August
2932.85
852.80
1310.60
1.85
1.27
11.13
10.05
1151
909.28
489355
Sept
3102.29
904.95
1379.78
1.89
1.32
11.30
10.29
1422
1256.66
504959
October
2812.49
824.00
1260.78
1.67
1.19
9.83
9.16
1435
1242.82
476609
November
2810.66
817.75
1254.10
2.06
1.18
11.12
9.09
1154
1011.04
476240
December
3055.41
884.25
1359.56
2.24