NEW DELHI. Dec 31: Political uncertainty remained the prime concern for the capital market throughout 1998 In India. The Observer of Business and Politics said here yesterday, reports Xinhua.

"Even though the market showed resilience, the fluid political and economic situation In India and around the world continued to throw up surprises, which is something market operators don't like." the paper said.

"Hopes of a bullish market were always followed by moments of despair throughout the year with the sensitive index of the Bombay Stock Exchange (BSE) touching a high of 4,000 and crashing to as low as 2.800." it said.

A bombshell was dropped, literally, in May when India exploded five nuclear devices at Pokhran. Anticipating US economic sanctions, the market fell sharply by 300 points, the paper said.

"The nuclear tests also soured India's relations with Pakistan and market operators were sure of a sizeable hike in the country’s defense budget." it further said.

"The June budget, however, disappointed market, unleashing a series of crashes which virtually drove the small investors out." it said.