Stocks crash on soaring inflation, global crude price (Weekly Market Roundup)June 21st, 2008 - 2:13 pm ICT by IANS
Mumbai, June 21(IANS) Indian equity markets touched their lowest point in the year so far in the week gone by, due to soaring inflation and rising global crude oil price. Three out of five trading sessions in the week ended deep in the red. As inflation touched 11.05 percent for the week ended June 7 - the highest since May 6 1995, when it was 11.11 percent - the market was caught unprepared.
The 30-share benchmark index of the Bombay Stock Exchange (BSE), the Sensex, fell by 618.33 points or 4.07 percent to 14,571.29 Friday, the day the government announced the latest inflation figure.
The S&P CNX Nifty index of the National Stock Exchange lost 169.55 points or 3.75 percent to end the week at 4,347.55.
The BSE Mid-Cap index declined 195.74 points or 3.14 percent to 6,032.43. The BSE Small-Cap index slumped 184.06 points or 2.43 percent to 7,397.66.
According to the Securities Exchange Board of India, the equity markets attracted $436.20 million in foreign institutional investments over the week.
According to market analyst, the higher than expected inflation figure caught the market off guard and investors fearing more tighter monetary policy hurried to sell.
Ashok Jainani, research head of Khandwala Securities Limited, said: “Market sentiment in the coming week will be mostly driven by the government’s action to tame inflation.”
However, he added that now it’s the time for investors with a long tem horizon. “Those who can hold for at least one year will start coming into the markets,” Jainani told IANS.
On Monday, the Sensex rose 206.20 points or 1.36 percent to 15,395.82.
On Tuesday, the Sensex gained 301.08 points or 1.96 percent to reach 15,696.90.
The fall started Wednesday, when the Sensex lost 274.59 points or 1.75 percent to drop to 15,422.31.
On Thursday, the Sensex lost lost 334.32 points or 2.17 percent more to close at 15,087.99.
Then came Friday’s big fall, when both Sensex and Nifty hit their lowest level in 2008 so far.
India’s second largest telecom services provider by sales Reliance Communications plunged 9.58 percent to Rs.491.30 in the week.
The world’s sixth largest steel producer Tata Steel declined 7.58 percent to Rs.777.60.
India’s largest commercial bank State Bank of India declined 6.52 percent to Rs.1,247.50.
But India’s largest tractor maker by sales Mahindra & Mahindra gained 0.84 percent to Rs.575.20.