The roller-coaster ride continued with stock markets falling substantially over the week. The BSE Sensex lost 179.95 points (3.06 per cent) to close at 5700.4 points. A similar situation prevailed at the NSE Nifty, which ended the week poorer by 2.97 per cent to close at 1812.2 points. Mid-caps had a relatively better showing. Nonetheless, the CNX Midcap 200 Index shed 2.07 per cent. Broad markets reflected this mixed performance with the BSE 500 down by 2.12 per cent over the week.
FII buying continued and there was a net inflow of Rs 648.5 crore. This was, however, less than half the net inflow seen in the previous week. Average daily trading volumes at Rs 7944.17 crore were 2.3 per cent higher than in previous week. Except for Monday, declining issues led advancing on all trading days across both exchanges.
The markets were off to an impressive start on Monday. PSU and bank stocks led the charge. The continued oversubscription of the ONGC issue saw the stock climb higher by 6 per cent to close the day at Rs 851. Other oil counters did equally well and IOC and HPCL gained 6 per cent and 6.3 per cent respectively. News of the proposed sale of the bad debts of ICICI Bank propelled the stock higher by 4.6 per cent. Expectations of a hike in cement prices saw Grasim, Gujarat Ambuja and ACC among the gainers.
The situation reversed dramatically on Tuesday and the losing streak would continue till Thursday. Tech stocks were among the major losers as concerns about an outsourcing backlash in the US continued. Infosys witnessed selling pressure on the news that the California government rejected the company's plea for tax relief. Index heavyweights Reliance Industries and HLL lost 2.25 per cent and 1.25 per cent respectively and this sent the Sensex plummeting. Broad-based selling continued into the next few trading sessions as well.
Index heavyweight HLL fell 3.27 per cent on Wednesday on the news that rival Procter & Gamble would be launching more products at discounted prices. Weakness in Reliance Industries also contributed to the fall in the Sensex. PSU and bank stocks also joined the list of losers. News that the Gujarat government had directed cement manufacturers not to increase prices impacted Gujarat Ambuja. ACC, Grasim and L&T also lost on account of selling pressure. Auto stocks were also in the red and on Thursday with Hero Honda losing 4.49 per cent while Tata Motors shedding 3.4 per cent.
It was only on the last trading session that markets staged a recovery. Tech counters led the revival. HLL also managed to stay in positive territory amidst news of strong industrial output growth of 7.4 per cent in January.
Despite recovering towards the end, the BSE IT and FMCG indices were the worst losers with losses of 2.46 and 1.82 per cent respectively. Bank stocks also fared badly on the whole and the BSE Bankex lost 1.96 per cent. PSU stocks were among the winners with the BSE PSU Index closing lower by 0.39 per cent.
Outlook
FII inflows continue to be robust and volumes have not fallen significantly over the past few weeks. The completion of the ONGC issue should release liquidity into the market and the reversal on tech counters on the last trading day could be a sign of things to come.
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