Sensex sheds 331, while Nifty tanks 120 points

Mumbai, July 29: The 30-share Bombay Stock Exchange (BSE) Sensex shaved off 330.98 points, or 2.13 per cent, to 15,234.57 last week, while the 50-stock National Stock Exchange (NSE) S&P CNX Nifty tanked 120.85 points, or 2.6 per cent, to 4,445.20, on account of a sharp fall in a single trading session on Friday.

''The Sensitive Index lost a whopping 542 points on the last day of trading last week due to a sharp correction on Asian and US bourses. Earlier, the market had remained firm for a better part of the week as renewed buying was witnessed due to good first quaterly (Q1) (June 2007) results and robust foreign institutional investor (FII) inflows,'' market analysts observed and added that profit taking was witnessed in small-cap and mid-cap shares after their recent solid surge.

BSE Small-Cap index shed 261.67 points, or 3.2 per cent, to 7,926.45 in the week, while BSE Mid-Cap index lost 237.75 points, or 3.48 per cent, to 6,598.32.

A good rollover was witnessed to the August 2007 series from the July 2007 series, when the contracts for July 2007 expired on Thursday.

According to one brokerage report, overall 83 per cent positions have got rolled on to August 2007 from July 2007. A good rollover of 73 per cent was witnessed in index futures as well. Institutional investors rolled over short positions in Nifty following the hedging of their positions in the cash market, market pundits pointed out.

''FIIs inflow in three trading sessions from Monday to Wednesday totalled Rs 2,322.40 crore. Mutual funds sold shares worth Rs 468.70 crore in four trading sessions from Monday to Thursday,'' market participants said.

Trading for the week began on an upbeat note. The Sensex surged 166.65 points, or 1.07 per cent, to 15,732.20, an all-time closing high on Monday. Shares from the auto, real estate and capital goods sectors were at the forefront of the rally.

Shares rose in China as well on that day. Shanghai Composite jumped 3.81 per cent to 4,213.36, even as the Central Bank raised borrowing costs, effective from last Saturday, in the latest of a series of moves aimed at capping inflation and preventing the world's fourth-largest economy from overheating.

The market extended its winning streak for the fifth straight session on Tuesday, helped by steady buying interest for capital goods, power and information technology (IT) stocks. Sensex rose 62.72 points to 15,794.92, an all-time closing high.

The market remained weak throughout the day on Wednesday, as correction set in after five straight days of rally. Sensex lost 95.59 points to 15,699.33. The weakness in global markets triggered profit taking.

Short covering ahead of expiry of this month's derivatives contracts aided 77-point surge in Sensex on Thursday. Two index heavyweights Reliance Industries and Infosys led the rally on that day.

Weak Asian and US markets spooked domestic bourses on Friday, as the Sensex plunged 541.74 points, or 3.4 per cent, to 15,234.57, registering its biggest rout in a single trading session in nearly four months. Stocks across Asia fell after the US market dropped 2.3 per cent on Thursday on signs of further weakness in the US housing market and deteriorating conditions for corporate buyouts. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were down between 2.4 per cent to 4 per cent.

The week's leaders included Reliance Energy, ITC, Maruti Udyog, Ranbaxy Laboratories, NTPC, Hindustan Unilever (HUL), index heavyweight Reliance Industries Ltd (RIL) and ONGC, while cement stocks, ICICI Bank and UTI Bank were the week's laggards.

The premier BSE on July 23 announced that it was shifting 45 scrips to trade-to-trade segment with effect from Friday. The stocks transferred to trade-to-trade segment included BAG Films, BSL, Dharamsi Morarji Chemical, Isibars, Pearl Engineering Polymers, VIP Industries and Southern Ispat among others.

''Meanwhile, a development that could increase domestic liquidity is the approval given by the Cabinet Committee on Economic Affairs on Thursday to public sector companies enjoying Navratna and Miniratna status to invest up 30 per cent of their surplus funds in equity mutual funds. The total surplus of central public sector units (PSUs) in 2005-06 was estimated at about Rs 2,39,500 crore, according to public enterprises survey. This means that about Rs 70,000 crore may flow to equity mutual funds. However, investments would be allowed only in public sector mutual funds,'' analysts explained.

Bowing to pressure from Left-backed trade unions, the Employees Provident Fund (EPF) board on Monday agreed to pay 8.5 per cent interest rate continuously to its nearly four crore subscribers for fiscal 2006-07 as well. The EPF has a corpus of Rs 94,000 crore including pension fund.

Data released on Friday showed that India's wholesale price index rose 4.41 per cent in the 12 months to July 14, higher than the previous week's 4.27 per cent due to increase in food prices, economists said.

UNI