The BSE Sensex ended the week with a whopping 4.5 per cent fall to close at 5655 points, while the S&P CNX Nifty declined 5 per cent over to 1796 points. The broader indices didn't fare any better. The S&P CNX 500 registered a 5 per cent drop and the CNX Mid-cap 200 followed with a 4 per cent fall.
FIIs chose to shy away from the market on fear of exit polls. They were net buyers for the week at just Rs 106 crore compared to more than Rs 1,800 crore in the previous week. Mutual funds were net sellers for the second consecutive week to the tune of Rs 67 crore.There was a 2.2 per cent rise in the combined average turnover for the week to Rs 7,710 crore. The advance-decline ratio was more than 1 for this week with the only exception of Tuesday when most of the shares declined on exit poll panic.
The exit poll predictions of a possible hung Lok Sabha took a toll on the markets. Disappointing quarterly numbers by FMCG major HLL added to the market woes. The price war with Procter & Gamble in the detergent and shampoo segment contributed to its poor performance. This is Hindustan Lever's worst quarterly fall (23 per cent drop in net profit) since March 1998. But the good news came from Reliance Industries which has become the first private sector company in India to achieve a net profit of $1 billion. The consolidated net profit of Reliance for 2003-04 jumped to Rs 5160 crore, a 26 per cent rise over the previous year. Among other corporate results, engineering majors BHEL and ABB posted good numbers. The country's fifth largest software exporter, HCL Technologies too clocked good quarterly and yearly performance. Bank major ICICI Bank also smiled its way to profits on the last day of the week.
Markets were closed on Monday on account of the second phase of polling. Tuesday was a bad day for the markets with the BSE Sensex shedding 213 points to 5712 points, the highest single-day fall in three years. Exit polls indicating a tough road ahead for the National Democratic Alliance led to this fall. The Sensex was marginally up as markets remained flat on Wednesday to close at 5713 points. The market again lost ground on Thursday as HLL dampened the sentiment with poor quarterly show; the Sensex dived 45 points to 5668 points. Even Reliance's excellent numbers failed to push the Sensex up as the results of India's largest private sector company bettered street expectations. The bearish sentiment continued on Friday too with the Sensex dipping 13 points to end the week at 5655 points.
In sectoral indices, the BSE PSU Index was the major victim of this bearish trend as it lost 6.3 per cent. The BSE FMCG Index declined about 3 per cent, thanks to HLL results. The BSE IT Index was down about 3.7 per cent despite good numbers from HCL Technologies. Amidst this high falling trend, BSE Healthcare Index stood firm with a marginal decline of 0.8 per cent. The BSE Bankex couldn't escape the downward trend ending the week in negative territory with a 3.2 per cent fall.
In global markets, the NASDAQ fell drastically to1920 points, a sharp 6.3 per cent decline over the previous week. The Dow Jones also headed downwards with a 2.3 per cent fall at 10,225 ahead of Tuesday's Federal Reserve meeting.
The prospect of uncertainty will continue as the markets look jittery ahead of the third phase of polling in the first week of May. The markets are likely to witness stock-specfic buying driven by results.