Fuel price hike, inflation dampen equities markets (Weekly Roundup)June 7th, 2008 - 3:01 pm ICT by IANS
Mumbai, June 7 (IANS) The Indian equities markets reacted negatively to the long-awaited hike in fuel prices and fears that inflation will go higher that the latest figure of 8.24 percent. Out of five trading sessions, four ended in the red. The central government Wednesday hiked petrol prices by Rs.5 a litre and diesel by Rs.3 to put the brakes on mounting losses by the state refineries on account of rising global crude prices.
Inflation touched 8.24 percent, compared to 8.1 percent the previous week.
The 30-share index of the Bombay Stock Exchange (BSE), the Sensex, declined 843.39 points or 5.14 percent to 15,572.18 during the week.
The S&P Nifty lost 242.30 points or 4.97 percent to 4,627.80.
The BSE Mid-Cap index fell 410.39 points or 6.07 percent to 6,350.15.
The BSE Small-Cap index slumped 436.99 points or 5.37 percent to 7,696.05.
The Sensex closed Monday with a huge decline of 352.39 points or 2.15 percent to 16,063. The S&P Nifty fell 130.5 points or 2.68 percent at 4,739.60.
The Sensex settled 100.62 points or 0.63 percent lower at 15,962.56 Tuesday. The S&P Nifty fell 23.70 points or 0.5 percent at 4,715.90.
After the government announced the hike in fuel prices Wednesday, the Sensex tumbled 447.77 points or 2.81 percent at 15,514.79.
The broader based S&P Nifty was down 130.3 points or 2.76 percent at 4,585.60.
The markets ended their three-day losing streak Thursday. The Sensex gained 254.93 points or 1.64 percent at 15,769.72.
The S&P Nifty was up 91.35 points or 1.99 percent to 4,676.95.
On the last day of trading session of the week Friday, the Sensex declined 197.54 points or 1.25 percent to settle at 15,572.18.
The S&P Nifty was down 49.15 points or 1.05 percent to 4,627.80.
Securities Exchange Board of India data shows the markets attracted Foreign institutional investment of $962.20 million during the week.
Explaining the falling trend in the market Ashok Jainani, research head of Khandwala Securities Limited, said: “By the recent fuel price hike, investors fear inflation will exceed the double digit number. Moreover, FII net inflows are going down due to the uncertainty in the market.”
He said overall, it paints a weak picture for the bulls in the coming week. “We can at best hope that good monsoon will bring back investors’ confidence in the market,” Jainani added.
Oil refiner Reliance Industries slipped 6.76 percent to Rs.2,239.35.
India’s largest private sector bank ICICI fell 2.21 percent to Rs.770.85.
State-owned Oil and Natural Gas Corporation (ONGC) surged 8.58 percent to Rs.938.50 during the week.
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