Indian markets continue southward trend

April 5th, 2008 - 2:54 pm ICT by admin  

A file-photo of Sensex
(Weekly Review)

Mumbai, April 5 (IANS) Indian equity markets continued its southward trend this week on concerns over inflation and the losses that corporate India could incur if it is forced to adopt some new rules on showing foreign exchange reserves. Some arbitrageurs and jobbers also stayed away from the market during the week to protest change in tax treatment of the securities transaction tax (STT) that came into force Tuesday. The protest led to low volumes, which saw share prices swing wildly on the first day of the new financial year 2008-09.

The 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) fell 1,028.17 points, or 6.28, percent at 15,343.12 points in the week ended April 4. The CNX Nifty of the National Stock Exchange (NSE) shed 295 points, or 5.96 percent, at 4,647 points.

The BSE mid-cap index logged a relatively lower fall of 259.94 points, or 3.99 percent, and so did the small-cap index that took a hit of 186.99 points, or 2.37 percent.

According to the data with market regulator Securities Exchange Board of India (SEBI), Indian equity markets attracted net funds from foreign institutional investors to the tune of $436.80 million over the week.

Sustained selling pressure in blue chips spooked the bourses Monday and the 30-share index plunged 726.85 points, or 4.44 percent, at 15,644.44 points. The Nifty fell 207.50 points, or 4.20 percent, that day.

Investors feared that the guidelines proposed by the Institute of Chartered Accountants of India (ICAI), asking companies to show their foreign exchange position as per their market value from this financial year, would result in book losses.

Tuesday saw the market open on a firm note. But it lost ground early afternoon only to recover later on buying interest in index heavyweights Reliance Industries and ICICI Bank.

Wednesday’s early surge on the bourses proved short-lived as index heavyweights Reliance Industries, ICICI Bank and L&T gave up their initial gains.

The Sensex, which had surged past 16,000-mark in early trade, fell below that level later. It settled at 123.78 points or 0.79 percent higher at 15,750.40, while the broader Nifty was up 14.65 points or 0.31 percent at 4,754.20 points.

On the day after, the benchmark index ended higher as IT stocks rallied on hopes that a US recession might not be as deep as feared. The Sensex settled 82.15 points or 0.52 percent higher at 15,832.55 points, while Nifty rose 17.4 points or 0.37 percent at 4,771.60 points.

As the trading week came to a close, the data on whole sale prices, that showed inflation at a three-year high, pulled the market down. The benchmark index fell 489.43 points, or 3.09 percent, at 15,343.12 points.

Nifty was also down 124.6 points or 2.61 percent at 4,647.

India’s largest electrical equipments maker by sales Bharat Heavy Electricals slipped 21.90 percent to Rs.1,634.10 after global investment firm JPMorgan Chase & Company reduced its share price estimate for the company to Rs.2,200 a share from Rs.2,850 earlier.

India’s largest private sector company in terms of market capitalisation Reliance Industries fell 1.08 percent to 2,322.20. The company said Tuesday it had discovered more gas in an exploration block off the east coast.

India’s largest private sector power utility company in terms of sales Reliance Energy slumped 12.54 percent to Rs.1166.35.

India’s largest private sector bank in terms of net profit ICICI Bank fell 8.56 percent to Rs.763.70.

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