Political tension, heavy selling add to markets’ despair (Weekly Roundup)December 27th, 2008 - 4:14 pm ICT by IANS
Mumbai, Dec 27 (IANS) A dampened Christmas, increasing political tension between India and Pakistan and slackening investors’ confidence triggered a sharp fall in Indian equities markets during the week, with a key index closing 7.6 percent lower than its close last weekend.”We were thinking that investors’ confidence would perk up after the Christmas break with a feel good spirit doing the rounds as it is customary during this time of the year, but that didn’t happen,” said Jagannadham Thunuguntla, head of the capital markets arm and director of India’s fourth largest share brokerage firm, the Delhi-based SMC Group.
Reports on a possible military strike by India on terror camps in Pakistan have added to the woes of the markets during the week.
The 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) hit an intra-week high of 10,173.54 points, but closed at 9,328.92 points Friday, 771 points lower than its previous close Dec 19 at 10,099 points.
Similarly, the broader-based 50-share S&P CNX Nifty index of the National Stock Exchange (NSE) hit an intra-week high of 3,110 points, but closed shop Friday at 2,857.25 points, about 220.25 points lower than its Dec 19 close.
The BSE midcap index ended the weekly trade at 3,106.68 points, down 97.88 points from its previous weekend close at 3,204.56 points.
The BSE smallcap index finished the week at 3,548.54 points, down 163.41 points from its previous weekend close at 3,711.95 points.
The Sensex finished Monday at 9,928.35 points, about 171.56 points or 1.7 percent lower than its previous close.
Nifty performed similarly with a fall of 1.24 percent or 38.2 points to close at 3,039.3 points.
Tuesday saw the market falling further with the Sensex closing trade at 9,686.75 points, a fall of 241.6 points or 2.43 percent from its previous close of 9,928.35 points.
Nifty also slumped and closed trade at 2,967.15 points, 2.37 percent lower than its previous close.
Christmas eve failed to brighten the markets as the Sensex continued to get beaten down, ending trade at 9,568.72 points, 118.03 points or 1.22 percent lower than Tuesday.
Nifty followed suit and slipped in the red to close at 2,916.85 points, about 51.8 points or 1.74 percent lower than its previous close.
Friday was no different with the markets ending a depressing week on a low. The Sensex fell again, closing at 9,328.92 points, a fall of 239.8 points or 2.51 percent from its previous close of 9,568.72 points.
Nifty closed at 2,863.80 points, 53.05 points lower.
Foreign Institutional Investors sold stocks worth $37.5 million during the week.
“It will still be some time before the market really makes an upward movement. Till then we can expect the occasional jolts that we are currently seeing,” added Thunuguntla.