Indian equities continued their losing streak with the BSE Sensex falling by 2.08 per cent to close at 5695.67 points with high volatility. It was a similar story at the NSE with the S&P CNX Nifty losing 2.05 per cent to close at 1809.75 points. Investors preferred to pare gains across all categories of stocks and this saw the CNX Midcap 200 Index fall by 2.15 per cent, while the broader S&P CNX 500 shed 2.32 per cent.
Average daily trading volumes at Rs 9548.37 crore were at similar levels to those seen in the previous week. The losing trend was also seen in the advance-decline ratio at the BSE, which remained under one on all trading days but Tuesday. In the midst of this gloom, FIIs improved their score pumping in Rs 645 crore over the week. This was 38 per cent higher than the inflows in the previous week. Till Thursday, mutual funds were net buyers of equity to the tune of Rs 104.86 crore.
The first trading session seemed to wipe out the bad memories of the previous week. The Sensex shot up by 176 points (3 per cent) as large-caps skyrocketed. On the BSE there were close to three advancing shares for every one that was declining. Tata Motors, BSES and ACC led large-caps with gains of 9.2 per cent, 8.17 per cent and 7.26 per cent respectively. Index heavyweights Reliance and SBI were also in the thick of things with gains of 4 per cent each, while HLL shot up by 3.6 per cent.
But from Wednesday it was all downhill, as markets lost ground on every trading session. Much of the fall was attributed to unwinding of positions in the futures and options segment ahead of the expiry of the January series of futures. The IT sector came in for a serious pounding with Infosys, Satyam and Wipro losing on all trading sessions except Tuesday. By the end of the week, the BSE IT Index was down 6.55 per cent with Infosys, Satyam and Wipro falling by 5.27 per cent, 6.96 per cent and 9.62 per cent respectively.
Reliance Industries declared its quarterly results during the week. Its net profit increased by 27 per cent over the corresponding previous quarter, while sales grew by 14 per cent. ICICI Bank saw its net profit increase by 33 per cent to Rs 440 crore. Good results helped keep these stocks afloat and Reliance closed the week at Rs 559.6 up 0.07 per cent, while ICICI Bank gained 1.08 per cent to close at Rs 295.25.
SBI, HDFC Bank and PNB however lost 4.6 per cent, 5.74 per cent and 5.02 per cent over the week to send the BSE Bankex into negative territory with losses of 3.11 per cent.
The week gone by witnessed the end of the era of development finance institutions with the passage of the IDBI Act Repeal Bill and the decision by PNB to accept its merger with IFCI. Along with ICICI, IDBI and IFCI had funded industrial projects for the past 45 years.
Healthcare stocks managed the fall best with the BSE Healthcare Index losing only 1.03 per cent. FMCG stocks were also relatively stable with the BSE FMCG Index losing 2.17 per cent. Losses among banking and energy stocks kept the PSU Index among the losers. A net profit of Rs 776 crore, which was more than double of that in the previous corresponding period, saw HPCL rise by 4.62 per cent. But ONGC and IOC fell by 5.65 per cent and 4.83 per cent. The overall result was that the BSE PSU Index shed 3.83 per cent.
Overseas the technology index NASDAQ lost 2.72 per cent while the Dow Jones Industrial Average closed lower by 0.76 per cent.
The current bout of volatility is expected to continue in the coming weeks as the government gets ready to present its vote on account on February 4, which will provide some direction to the market. More announcements in the run-up to electoral season should see markets in a reactive mood.