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Sensex Falters, Drops Below 17k

The markets had bad times during the past week with no signs of positive returns from anywhere

Last week saw the markets run out of steam. The Sensex ended the week below the 17,000 level, which seemed inaccessible right through the week. All five trading sessions for the week ended on May 9, 2008 ended in red.

Both the Sensex and the Nifty are now lurking below the psychological levels of 17000 and 5000, respectively. On the last trading session, Sensex closed the day at 16,737.07, down 2.01 per cent or 343.58 points after hitting an intraday low of 16,678.94. The Nifty touched an intraday low of 4969.40, before ending the day at 4982.60, down 1.95 per cent or 99.1 points. Overall the market remained weak, the Sensex was down nearly 5 per cent and the Nifty fell 4.8 per cent.

Higher inflation numbers, weak global cues and crude prices did the damage and were the real culprits. Inflation for the week ended April 26 stood at 7.61 per cent as against 7.57 per cent in the previous week, which was in line with market's estimates. Inflation remained at 42-month high.

The CNX Midcap Index was down 4.6 per cent and the BSE Small Cap was down 3.8 per cent for the week ended on May 09, 2008. Reliance energy (12 per cent), BHEL (10 per cent), L&T and SAIL (9 per cent each) were among the top losers among Nifty. Among the sectoral indices, BSE Realty Index was down 9.6 per cent - DLF was down 13 per cent and Unitech & GMR Infra down 10 per cent each. The BSE Bankex was down 7 per cent - State Bank of India was down 8 per cent, ICICI Bank down 7 per cent, HDFC Bank down 6 per cent and the BSE Oil & Gas Index was down 5.4 per cent - HPCL down 8 per cent, BPCL down 7.6 per cent.

FIIs were net sellers in equities to the tune of $96 million, while mutual funds bought equities to the tune of $8 million dollar for the week ended on May 09, 2008. Going ahead, global cues and inflation numbers will be the key determinants of the markets.