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Sensex Topples

Despite managing a reversal of fortunes Wednesday, the market had it bad this week. Banking stocks were amongst the worst hit

The news took their toll on the bulls this week. High oil prices posing an inflationary risk, gold prices scaling new highs and clear signs of worldwide economic slowdown were not easy to deal with. Back home, the short-term capital gains tax hike introduced in the Budget did not help.

Monday was a day to remember. The Sensex lost 900 points and the Nifty, 270 points. Only 4 stocks of the Sensex advanced. RIL, ICICI Bank, HDFC and SBI were among the major laggards. However, Hindustan Unilever, Cipla, Ranbaxy and Maruti were among the major gainers.

On Tuesday, the fall could not be stemmed as the market tumbled on news that ICICI Bank has suffered a mark-to-market loss of $264mn on some of its loans and investments. Despite a clarification that it has no material direct or indirect exposure to US subprime credit, the ICICI Bank stock took a hit.

Thankfully on Wednesday, the trend was reversed. The Sensex gained on buying interest in IT stocks and also in the defensive pharma stocks and the under performing FMCG stocks. But all smiles were wiped off from faces when the market again slumped on Friday. The Sensex fell to its biggest weekly decline in 21 months.

All BSE sectoral indices ended the week lower than Monday's close. The worst hit with the BSE Bankex. It closed on Monday at 9434.44 but slumped to close at 8477.46 on Friday. This was partly due to the ICICI Bank debacle, to the loan waiver to farmers in the Budget and to the statement made by the finance minister that borrowing costs should be cut on home loans.

When compared with last week's closing, Maruti Suzuki was the only Sensex stock to have gained (7.60%). All other stocks closed lower with the biggest losers being Reliance Energy (-18.99%) and ICICI Bank (-18.17%).

Vital Stats: March 3-7, 2008
  Sensex  Nifty  BSE Mid Cap  CNX Midcap
Mon 16677.88 4953.00 7364.85 6975.05
Tue 16339.89 4864.25 7182.23 6825.75
Wed 16542.08 4921.40 7114.18 6743.20
Fri 15975.52 4771.60 6804.39 6501.35
Net Buying (Equity)
  FII  MF    
Mon -683.60 -452.90  
Tue -472.80 -151.50  
Wed -129.70 -280.10  
Figures in Rs/crore
  BSE Turnover  BSE Shares  NSE Turnover  NSE Shares
Mon 5106.59 2559.00 12754.20 4866.55
Tue 5819.09 2928.00 14486.30 5777.73
Wed 5363.43 2671.00 12086.97 4466.24
Fri 6272.94 2897.00 14958.33 5560.94
Number of shares in lakh. Turnover in Rs/crore.