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Sensex Plummets

The nuclear deal gave some respite to the bulls on Monday. But their euphoria was short lived. It is the daily triggers – global & local – that determine the day-to-day course.

Though the previous Friday (September 5) ended on a sombre note, there was a lot that happened this week.
The U.S. government's decision to bail out troubled mortgage giants, Freddie and Fannie was good news. But worries continue on the financial sector as Lehman Brothers reported a nearly $4 billion quarterly loss – it’s biggest since it went public in 1994.
In a landmark scientific experiment, scientists at CERN intended to re-enact the conditions of the "Big Bang" that created the universe. The Large Hadron Collider (LHC) is the biggest and most complex machine ever made.
The price of crude dipped below $100/barrel.
The Indian government won the backing of the 45-nation Nuclear Suppliers Group (NSG) to trade in atomic fuel and technology in the global market.
The outflows by FIIs continue and the rupee fell.
Monday was the only day in which the bulls reigned supreme with all the Sensex stocks ending in the green though RIL, ICICI Bank and L&T were the biggest gainers. Though buying was witnessed across the sectors, capital goods and power stocks were in the limelight after India won the backing of the NSG. Companies like BHEL, NTPC, Tata Power and L&T are eyeing high-value contracts and joint ventures.

From Tuesday onwards, the downturn began. Tuesday began on a weak note with the market mirroring losses in the Asian markets. The banking, realty and capital goods stocks were among the major laggards in the early trades. However, after hitting an intra-day low of 14,714 the Sensex gradually gained momentum led by the oil & gas, IT and select telecom stocks. As the day progressed, a sharp recovery in European markets and a sudden slide in crude oil prices lifted the sentiments.

If the Sensex and Nifty dipped marginally on Tuesday, they fell on Wednesday as weak global cues again dragged the sentiments on Dalal Street. The U.S. stocks slumped overnight and Asian markets ended lower. Metal, oil & gas and power stocks witnessed offloading and only 6 stocks ended in positive terrain. RIL, Sterlite Industries and Bharti Airtel were among the major laggards while Infosys, ITC and SBI were among the gainers.

Unfortunately, the same trend continued on Thursday and the market dipped substantially on Friday. Technology stocks fell on revenue fears that the stronger dollar would undermine earnings from European countries. The BSE IT which closed on Wednesday at 4,072.56 ended the week at 3,973.29.

A better-than-expected rise in industrial output data could not contain the aggressive selling that the market saw at the end of the week. The Sensex which closed on Monday at 14,944.97, ended the week at 14,000.81.