Mumbai: Disappointed over the Common Minimum Programme (CMP) announced by the United Progressive Alliance (UPA) yesterday (May 27, 2004), the market dropped sharply by 70 points at 10.30 hrs (IST) after a weak start on the Stock Exchange today (May 28, 2004).

Brokers said there was nothing for the market as well as foreign investors in the CMP which has done little to allay investors fears over the pace and extent of economic reforms.

The BSE Benchmark 30-share Index opened substantially lower at 5026.92 as against yesterday's close of 5058.55 and later fell sharply to a low at 4981.06 before being quoted at 4989.00 at 10.30 hrs (IST), a net fall of 69.55 points.

On the National Stock Exchange (NSE), the S&P CNX Nifty was quoted at 1562.80 at 10.30 hrs (IST) as against yesterday's close of 1586.40, down by 23.60 points.

Commenting on the privatisation issue, brokers said though the Government is open to disinvestment of upto 49 per cent in PSUs including profitable ones, it has scrapped the Disinvestment Ministry indicating that majority stake and management control would remain with the Government. This will automatically discourage foreign investments in the country.

Reacting negatively to lack of clarity in the CMP as to how the Government will mobilise resources, operators and retailers pressed nervous sales in blue chip counters to book profits at the prevailing price levels.

Power sector bore the brunt of selling triggered by the UPA Government decision to review the Electricity Act, 2003 and defer the mandatory date for unbundling and replacing of the State electricity boards, brokers added.

Key counters like REL, Tata Power, BHEL, RIL, SBI, Tisco, Tata Motors, Wipro, ONGC, MUL, ITC, ICICI Bank, HPCL, Hero Honda, Grasim, GACL, Cipla and Bajaj Auto were quoted sharply lower due to selling pressure.

However, software stocks witnessed some buying support as investors shifted their focus to IT sector. Infosys Tech, Satyam computers, NIIT, Mastek, Polaris Soft, Visual Soft and Hexaware Tech showed moderate gains.