Sensex extends losses to 1,274 pts at 8,701 mark

Subscribe to Oneindia News

Sensex
Mumbai, Oct 25: The Bombay Stock Exchange (BSE) 30-share Sensex plummeted 1,274.28 points (12.77 per cent) to end at 8,701.07 in the week, ended on Friday, Oct 24, following sustained panic offloading by FIIs coupled with disappointments from the RBI monetary policy review.

The RBI, yesterday in its mid-term review of the annual policy statement for 2008-09, kept the bank rate, repo rate, reverse repo rate and cash reserve ratio unchanged. It also revised India's GDP growth projection for the year at a range of 7.5 to eight per cent, down from its earlier projection of around eight per cent. The new RBI governor D Subbarao, in his first review with Bankers, expected to bring down the inflation to under five per cent from the current level of 11.1 per cent. Banking stocks slumped as the central bank did not announce any measures to boost liquidity in the policy review.

The S &P CNX Nifty index of National Stock Exchange (NSE) declined by 490.35 points or 15.94 per cent at 2,584 points in the week.

The key benchmark indices extended losses for the fifth consecutive week, closely mirroring their global counterparts, as fears of sharp global economic slowdown shattered investors sentiment. Market edged lower in three out of five trading sessions. It was the worst weekly performance of the Sensex and Nifty in more than three years.

Brokers said sustained offloading by Foreign Institutional Investors (FIIs) and muted Q2 September 2008 corporate report added to the sell-off. FII have sold Rs 11,736.10 crore shares, much more than what they have bought in October 2008 so far, till October 22. Their sales has reached Rs 48,527.90 crore in calendar 2008.

The BSE Mid-Cap index fell 449.16 points or 12.67 per cent at 3,095.68 and the BSE Small-Cap index lost 506.03 points or 12.14 per cent at 3,661.83. Both the indices outperformed the Sensex.

The barometer index of BSE is down by 11,585.92 points or 57.11 per cent in the calendar year 2008 so far, from its close of 20,286.99 on December 31, 2007. It is 12,505.70 points or 58.97 per cent below its all-time high of 21,206.77, struck on January 10, 2008.

Trading for the week started on a positive note after the Reserve Bank of India (RBI), on Monday, announced a 100 basis points cut in repo rate to eight per cent, with immediate effect. The repo rate is the rate at which the RBI provides funds to banks against the collateral of government bonds for a day to three days. The BSE 30-share Sensex gained 247.74 points or 2.48 per cent at 10,223.09 and the S &P CNX Nifty was up by 48.45 points or 1.58 per cent at 3,122.80 on that day.

But weak global markets, cautious outlook by IT major Wipro and sustained selling by foreign funds played the spoilsport on October 22. The BSE 30-share Sensex lost 513.49 points or 4.81 per cent at 10,169.90 and the S &P CNX Nifty was down 169.75 points or 5.25 per cent at 3,065.15 on that day.

Finance minister P Chidambaram's comments that the Securities &Exchange Board of India (SEBI) has asked (FIIs) to reverse short positions on borrowed shares, triggered a solid intra-day pullback after early slide, caused by weak global cues on October 23. The BSE 30-share Sensex lost 398.20 points or 3.92 per cent at 9.771.70 and the S &P CNX Nifty slipped by 122 points or 3.98 per cent at 2,943.15.

''Global equities routed on worries about a sharp global economic slowdown and second disappointing quarter monetary policy review by the central bank led to carnage on the domestic bourses, yesterday,'' they added.


UNI

Please Wait while comments are loading...