Markets continue losing streak over the week

June 28th, 2008 - 4:18 pm ICT by IANS  

A file-photo of Sensex

Mumbai, June 28 (IANS) The Indian equities market continued its downtrend this week on the back of soaring crude oil prices and high inflation which weighed heavily on investors’ sentiment. The 30-share BSE Sensex fell to its lowest level in 13 months while the Nifty touched a 10-month low. Out of five sessions, three ended in the negative.

The wholesale price index rose to 11.42 percent in the 12 months to June 14, above the previous week’s annual rise of 11.05 percent.

The Reserve Bank of India (RBI) June 24 raised its key lending rate - the repo rate - by 50 basis points to 8.5 percent with immediate effect, its highest since March 2002 and, its second hike this month.

The apex bank also increased the cash reserve ratio - the ratio of deposits banks must keep with it - to 8.75 percent from 8.25 percent in two 25-basis-point stages July 5 and July 19.

According to market regulator Securities and Exchange Board of India, the Indian equities market attracted an investment of $600 million over the week.

Explaining the market downtrend, Asish Poddar, research analyst of Mumbai-based firm Almondz Global Securities, said: “The next few weeks will be bearish and volatile for the Indian equity markets. On the domestic front, political uncertainty over the nuclear deal will weigh heavily on investors’ sentiment.

“On the global front, the quarterly results of global financial institutions, especially in the US, will more or less decide the course of the market,” Poddar told IANS.

The Sensex declined 769.07 points or 5.28 percent to 13,802.22 in the week ended Friday, June 27. The S&P Nifty lost 210.90 points or 4.85 percent to 4,136.65 in the week.

The BSE Mid-Cap index declined 473.68 points or 7.85 percent to 5,558.75. The BSE Small-Cap index slumped 459.59 points or 6.21 percent to 6,938.07.

On the first day of the trading week, June 23, the market suffered losses to settle at a 10-month low on the back of sustained selling pressure across the sectors.

The BSE Sensex lost 277.97 points or 1.91 percent at 14,293.32. The broader based S&P Nifty was down 81.15 points or 1.87 percent to 4,266.40.

The market continued its slide June 24, with the 30-share BSE Sensex falling below the psychologically important 14,000-mark. The Sensex barometer was down 186.74 points or 1.31 percent at 14,106.58. The broader based S&P Nifty slumped 75.30 points or 1.76 percent at 4,191.10.

The market ended its five-day losing streak June 25 despite the RBI hiking repo rate.

The BSE Sensex gained 113.49 points or 0.8 percent at 14,220.07. The broader based S&P CNX Nifty surged 61.55 points or 1.47 percent at 4,252.65.

For the second consecutive day of the week June 26, short covering ahead of expiry of June derivatives contracts helped the market to move higher.

The Sensex gained 201.75 points or 1.42 percent at 14,421.82. The broader based S&P Nifty was up 63.20 points or 1.49 percent at 4,315.85.

On the last day of the trading session of the week, Friday, the market suffered a major loss when spurt in global crude oil prices hit domestic bourses hard.

The Sensex tumbled 619.6 points or 4.3 percent to 13,802.22. The broader based S&P Nifty fell by 179.20 points or 4.15 percent at 4,136.65.

India’s largest private sector company in terms of market capitalisation, oil refiner Reliance Industries (RIL), rose 4.07 percent to Rs.2,181.90 in the week.

Reliance Communications (RCom), the second largest private telecom services provider, lost 3.61 percent to Rs.473.55.

India’s leading pharma company Ranbaxy Laboratories fell 3.61 percent to Rs.523.05.

India’s largest private sector lender ICICI Bank plunged 11.1 percent at Rs.653.10.

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