Mumbai, Nov 22: The BSE 30-share Sensex suffered a setback of 470.21 points or 5.01 per cent to settle 8,915.21 in the week ended on riday, Nov 21 in wake of the global meltdown and selling of foreign funds.
The S &P CNX Nifty index of NSE also declined by 116.90 points or 4.15 per cent at 2693.45 in the week, following fears of a prolonged global recession and slowdown in the domestic economy. The market edged lower in four out of five trading sessions, amid high volatility. The BSE Small-Cap and Mid-Cap indices tumbled on intense selling pressure. The BSE Mid-Cap slumped 299.42 points or 9.31 per cent at 2,916.66 and the BSE Small-Cap index shed 374.29 points or 9.94 per cent at 3,390.76.
The barometer index BSE Sensex is down 11,371.78 points or 56.05 per cent in the calendar year 2008 so far from its close of 20,286.99 on December, 31 2007. It is 12,291.56 points or 57.96 per cent below its all-time high of 21,206.77 struck on January 10, 2008. Sustained selling by the foreign institutional investors (FII) to shore up resources to beat the global liquidity crunch, have weighed heavily on the bourses since 2008. FII outflow reached Rs 53,476.90 crore in calendar 2008, till November 20. Trading for the week started on a dull note with the market declining on first four days, despite the Reserve Bank of India announcing measures to shield the Indian economy from the global economic slowdown. Brokers worried about a weakening domestic and world economy, political uncertainty due to ongoing state elections, and weak global cues played spoilsport. Fears of more foreign fund sales pulled the market lower on Wednesday, offsetting hopes of more measures from the government and RBI to help revive the domestic economy.
Key benchmark indices edged higher on Friday, November 21, as battered pivotals made a comeback snapping seven-day losses. A surge in US index futures and gains in European stocks boosted the domestic bourses.
World stocks also fell on worries of recession, amidst doubts about the survival of US's second leading bank Citigroup and reports that their economy could shrink by 0.2 per cent through 2009.
Reports of bankruptcy risks in US automakers, General Motors Corp, Ford Motor Co and Chrysler LLC if the bail-out plan fails, sent the world stock indices to 5-1/2 year lows on November 20, 2008. The rising jobless claim, which touched to a 16-year high in the US, was also expected to worsen the US economy further.
Reliance Industries (RIL) fell by 1.85 per cent at Rs 1,127.35 in the week on concerns of global slowdown hitting demand for petrochemicals. IT stocks fell on mounting worries about US economy after the Federal Reserve slashed its growth forecasts for the economy, as Indian IT firms derive a lion's share of revenue from exports to US.
India's second largest IT exporter Infosys fell 2.72 per cent at Rs 1,184.74 after chief executive S Gopalakrishnan said that the currency movement will have an impact on revenue in Q3 December 2009 and that the company is seeing flat billing rates, on November 17.
Wipro was down by 4.61 per cent at Rs 229.80, Satyam Computer Services eased by 8.05 per cent at Rs 240.60 and TCS came down by 4.32 per cent at Rs 506.55, Metal stocks also declined on worries of the economic slowdown affecting the demand. Hindalco Industries dropped 8.30 per cent at Rs 51.90, Sterlite Industries came down by 3.72 per cent at Rs 218.75 and Tata Steel was down by 7.62 per cent at Rs 160.05.
Auto stocks declined on a worsening global economic outlook and declining domestic demand, due to high interest rates and fuel prices. Maruti Suzuki India geared down by 4.71 per cent at Rs 511.35 followed by Mahindra &Mahindra by 6.49 per cent at Rs 309.25 and Tata Motors by 2.45 per cent at Rs 133.60.
Private sector banking shares slipped on worries about bad loans in a slowing economy. India's second largest private sector bank, by net profit, HDFC Bank lost 15.32 per cent at Rs 856.70. Country's largest private sector bank ICICI Bank slumped 15.25 per cent at Rs 335.55, after it halved its lending growth target for March 2009 to 15 per cent in a slowing economy.