Sensex crashes by 185 points

Mumbai, Dec 16: The Sensex lost 184.97 points for the week ended December 15 to 13,614.52 on the Bombay Stock Exchange(BSE), while the NSE Nifty lost 63.90 points, to settle at 3,888.65.

The BSE Sensex snapped its winning streak, posting a loss for the week ended on Friday, on profit-booking.

The Sensex started the week with a sharp plunge of 400.06 points, to settle at 13,399.43, on December 11, after the RBI came out with a surprise 0.5 per cent hike in cash reserve ratio (CRR), after market hours on December 8.

On December 12, the BSE Sensex registered a mammoth 404.41 point loss, to settle at 12,995.05 as selling continued following data showing lower-than-expected 6.2 per cent growth in industrial production in October 2006, which raised fears of economic slowdown.

The BSE Sensex jumped by 186.32 points on December 13, to settle at 13,181.34, on bargain-hunting after a steep fall and on short covering later in the day.

The market continued to recover due to strong buying in index pivotals, with the Sensex gaining 305.82 points to 13,487.16 on December 14.

The Sensex jumped by 127.36 points, to settle at 13,614.52 on December 15 on the back of firm global markets, and a decline in inflation.

In a surprise move, the RBI hiked cash reserve ratio (CRR) by 50 basis points after trading hours on December 8. The RBI move fuelled expectations of rise in lending and deposit rates by Indian banks.

They are likely to take a final view on raising interest rates on loans as well as deposits, by the end of this week, or early next week.

India's wholesale price index rose 5.16 per cent in the 12 months on December 2, lower than the previous week's annual rise of 5.30 per cent helped by a decline in food and energy prices, data showed on ( December 15.

India's industrial production rose 6.2 per cent in October from a year earlier, which was well below market expectations, lower-than-expected manufacturing output being the prime culprit for the slowdown. Output growth for September remained unchanged at an annual 11.4 per cent reported earlier.

Manufacturing production, which represents more than 75 per cent of industrial output, rose 6.0 per cent in October from a year earlier, compared with 12.0 per cent annual growth in September, brokers said.

UNI