Sensex loses 652.04 points this week

By Staff
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Google Oneindia News


Mumbai, Jan 26: Riding on high and low tides in the global market, the barometer sensitive index (Sensex) finally lost 652.04 points or fell by 3.42 per cent, despite registering a historic single-day point gain in the Indian equity market when the week ended on January 25.

The benchmark Sensex of Bombay Stock Exchange, which plunged sharply by 2,284 points or 12 per cent in the first two sessions, bounced back to recover by 1,631.72 points to end the week at 18,361.66 on positive sentiments in the Asian market after US Government assured plans for supporting its economy.

Sensex registered a record single-day point fall of 1,408.35 on January 21 followed by a historic single-day point rise of 1,139.92 on January 25, though it remained 2,512 points down from its all time high of 20,873.33 on January 8. Moreover, it fluctuated in a wide range between 15,500 and 18,900 amid phenomenal volatility through out the week.

On a similar note, after fluctuating in a wide range band, the broader-based Nifty index of National Stock Exchange ended the week at a loss of 321.95 points or 3.42 per cent, however, it witnessed a sharp correction on Friday by ending the weekend session with a gain of 350 points.

Market analysts observed that margin calls created havoc in the bourses which caused a steep downfall in share prices during the week, initially triggered by a setback in global markets and also selling by foreign institutional investors (FIIs).

Foreign funds sold a net of Rs 23,013 crore in cash, while net purchase by them was of Rs 208 crore on Friday, after a nine-day long pause. Domestic Institutions made a net purchase of Rs 248 crore in a choppy traded market.

Indian equity market was more or less cheered, in the last session of the week, following rally in indices including reality, power, oil and gas, banking as well as frontline stocks, which were the worst hit earlier, analysts said.

Further they are of the view that for the future sessions of Indian bourses' follow-on track would be decided on the Reserve Bank of India's quarterly review of its monetary policy scheduled on January 29, 2008.

Reportedly, it is being expected that a sharp cut in US interest rates this week has increased the possibility of a 25 basis points repo rate cut by Indian central bank. However, bankers as well as market analysts are divided in their view.

Moreover, the extended liquidity crunch in the secondary market caused by huge funds tied to the recently concluded mega Rs 11,000 crore IPO of Reliance Industries, would continue till the time of allotment of shares in the IPO. Meanwhile, another mega IPO is that of Emaar MGF Land, about 40 per cent owned Dubai's Emaar Properties, will be open for bidding on February 1. The company has planned to raise about USD 1.8 billion through its IPO, brokers said.

Indian market could witness an upsurge in foreign inflows following the US Federal Reserve's rate cut, in a surprise move, analysts opined.

According to data sources, outflow of Rs 9943.70 crore was accounted for January, through FIIs, till January 23. Annual inflation, based on the wholesale price index (WPI), moved up to 3.79 per cent from 3.5 per cent in the week.

UNI

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