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Markets in Correction Mode

Though FIIs continued to pour money, widespread profit booking dragged major indices down. The Sensex missed 10,000 levels by a whisker to close 1.30 per cent down over the week

Markets underwent correction during the week ended February 3, 2006. Though foreign institutional investors continued to pour money into the Indian markets, widespread profit booking dragged major indices down. Through the week, the 30-stock BSE Sensex moved in the rage of 9993.92 to 9713.51 levels before finally ending the week down 1.30 per cent or 128 points at 9742.58 levels. Nifty too lost 1.41 per cent to 2940.6 levels. Among the broader indices, the S&P CNX 500 closed 1.44 per cent down, while CNX Midcap index lost 1.28 per cent over the week.

Though markets opened on a positive note on Monday, profit booking snapped further rally immediately. Sensex dipped on Monday after touching a new high early in the day, as investors looked to book profits. The index lost over 21 points to end the day at 9,849.03 levels, after touching a high of 9,945.19 during early trades.

Tuesday brought some cheer as the markets recovered marginally. Sensex hit a new closing high on prospect of speedier economic growth. The Sensex added nearly 71 points to close at 9,919.89 levels. However, the upbeat mood could not last for long as Indian shares fell the very next day. In a day when it seemed that the Sensex would finally touch a figure of 10,000, Indian shares fell sharply in volatile trade on Wednesday to close 61 points down at 9859.26 levels.

Markets had yet another positive start on Thursday but jittery investors resorted to profit booking as Indian stocks failed to hold on to their gains despite good news on leading stocks. After touching a high of 9,956.1 points, the Sensex lost 15 points to close at 9,843.87.

Indian stocks fell for the third straight day on Friday. The 30-stock BSE Sensex closed 1.03 per cent or 101 points down at 9,742.58 levels.

Among the 30 Sensex stocks, 14 ended the week in the positive territory. Leading the pack of gainers was Cipla which added 9.25 per cent after it said its board would consider a bonus share issue and raising a foreign investment cap for its shares. The drug maker had reported 40 per cent growth in its third quarter net profits last week. Among the biggest losers of the week included ONGC (down 8.34 per cent) and Gujarat Ambuja Cements (down 7.94 per cent).

Among the sectoral indices, BSE Healthcare was exception in a week dominated by bears. The index zoomed 2.85 per cent. BSE Metal too ended the week marginally up 0.77 per cent. Banking stocks lost heavily as the BSE Bankex shed 5.71 per cent.

The combined daily average turnover on both exchanges dropped 10.69 per cent to Rs 10,552 crore in the week ended February 3, 2006. The FIIs invested nearly Rs 1,461 crore. Domestic mutual funds too invested Rs 24 crore over the week.