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Unlucky Friday

Unlucky Friday

Last week the market fell almost 16%, the second highest fall in its history of 29 years. This trend prevailed as Sensex slipped to being a four digit number with the Friday closing at 9975 points with a 5% decline this week.

After closing at 10,527 last Friday, the BSE Sensex shot up by a whopping 781 points on Monday, to close at 11,309, up nearly 7% from its previous close. This sudden spurt resulted from the massive bailout plan announced by the European Union and also on the back of assurances given by the Finance minister back home.

The biggest gainer in Monday’s rally was ICICI Bank which rose 17% to Rs 425. The bank’s shares fell by a record 28% in the previous week. Other major gainers included State Bank of India and HDFC Bank.

Tuesday also saw the market opening on a positive note. The BSE Sensex surged to 11,870 during the day but later in the day shed most of its early gains to close at 11,483, up just 174 points from its previous close. The Nifty also slipped from day's high of 3,648 to close at 3518, up just 27.95 points.

Other major happening on Tuesday was RBI's announcement of Rs 20,000 crore liquidity window for the mutual funds to help them face redemption pressure.

After a two-day relief rally, on Wednesday the market again succumbed to the bears. The Sensex fell 674 points to close 6% down from its previous close. Also on the commodities front, the oil prices fell steeply to a 13-month low.

Later in the day, a slew of measures were introduced by the government and the RBI to ease the liquidity crunch in the market. These included a further cut of 1 % in the CRR and also a hike in the investment ceiling for FIIs in corporate debt to $ 6 billion.

Though these measures accelerated the flow of liquidity into the financial system, not much respite was provided to the Indian stock market as the Sensex still slipped lower to 10,017 on Thursday before finally closing at 10,581, 2 % down.

Friday had the worst in store for the Indian equity market. The Sensex breached the psychological 10,000 level to hit a low of 9,911 before finally closing at 9,975. All the 30 stocks in the Sensex pack ended in the red. The major laggards that pulled the Sensex down were Reliance Infrastructure, Jai Prakash Associates, DLF, NTPC and Reliance Communication. All the BSE sectoral indices also ended in the negative zone.