Markets erase early losses, end week in green (Weekly Roundup)September 20th, 2008 - 3:53 pm ICT by IANS
Mumbai, Sep 20 (IANS) Assurances from Indian Prime Minister Manmohan Singh and Finance Minister P. Chidambaram together with positive global cues saw Indian equities markets recover from Black Monday blues to end the week with marginal gains.The sensitive index (Sensex) of the Bombay Stock Exchange (BSE) ended the week Friday at 14,042.32, gaining 41.51 points or 0.29 percent during the week from its previous close last Friday at 14,000.81.
The broader based 50-share S&P Nifty index of the National Stock Exchange (NSE) also ended the week Friday gaining 16.8 points or 0.39 percent in the week to 4,245.25, up from its previous close last week at 4,228.45.
The recovery on both the exchanges was, however restricted mainly to the large cap and index component stocks. Mid cap and small cap failed to recover enough and ended the week in the red.
The BSE mid cap index shed 308.36 points or 5.56 percent in the week to close Friday at 5,228.78 against its last week close at 5,537.14.
The BSE small cap index too lost 495.55 points or 7.38 percent during the week to finish Friday at 6,215.99 against its last week finish at 6,711.54.
With early morning news that the world’s fourth largest investment bank Lehman Bros had filed for Chapter 11 bankruptcy and the world’s third largest investment bank Merrill Lynch had agreed to a buy out by Bank of America, Monday morning saw panic selling on Indian markets.
The BSE sensex fell by over 750 points in the morning before staging a smart recovery in the afternoon on short covering. But it still ended Monday at 13,531.27, down 469.54 points or 3.35 percent from its previous closing last week Friday.
The broader based 50-share S&P Nifty index of the National Stock Exchange also saw a similar trend Monday.
In the morning it fell by over 244 points before staging a recovery to end Monday at 4,072.90, down 155.55 points or 3.68 percent from previous close Friday last week at 14,000.81.
This trend of opening weak and then recovering later in the afternoon continued for rest of the week except Friday when markets opened strong and staged one of the sharpest rallies in recent weeks to end with substantial gains wiping out losses in the earlier days of the week.
On Tuesday, the BSE Sensex opened with a fall of nearly 500 points but ended the day at 13,518.80, down just 12.47 points or 0.09 percent from its previous closing Monday at 13,531.27. The NSE Nifty too opened weak but recovered to end marginally up at 4,074.90, a gain of 2 points or 0.05 percent.
On Wednesday, sentiment was weak throughout the day and the BSE Sensex closed at 13,262.90, down 255.90 points or 1.89 percent over its previous close Tuesday at 13,518.80. The NSE S&P Nifty too shed 66.65 points or 1.64 percent to close at 4,008.25.
Thursday saw some dramatic action on the markets.
Punters entered the market with a “gloom and doom” outlook following very weak global cues but then strong buying by domestic institutions and an assurance by Finance Minister Chidambaram restored confidence.
Despite a more than 700 points fall in the morning, the BSE Sensex recovered enough to end Thursday with a small gain of 52.70 points or 0.40 percent at 13,315.60. The NSE Nifty too fell nearly 200 points before recovering to close at 4038.15, up 29.9 points or 0.75 percent against its previous close.
On Friday another assurance from Prime Minister Manmohan Singh about the strength of the Indian economy and its insulation from global financial turmoil saw punters entering the market for the first time in the week on a buying rather than selling mood.
The BSE Sensex opened strong, up nearly 500 points and remained strong throughout the day to end with a big gain of 726.72 points. The NSE Nifty too opened strong, climbed throughout the day to close at 4245.25 points, up 207.1 points or 5.13 percent.
Throughout the week, however, the sentiment was negative and there was general nervousness, analysts said.
Consequently, when markets posted gains Thursday and Friday to wipe out losses earlier, buying was restricted mostly to large cap and index component stocks. Mid cap and small cap stocks suffered as a result.
The outlook for the next week remains weak, analysts said but most agreed, the worst seemed to be over and the market should post further gains next week unless some more bad news breaks out.
Tags: bombay stock exchange, chapter 11 bankruptcy, component stocks, indian prime minister, indian prime minister manmohan singh, lehman bros, manmohan singh, marginal gains, national stock exchange, prime minister manmohan singh