Further rate hike fears allow bears control of Indian equities (Weekly market review)

Saturday, January 29, 2011

MUMBAI - Bears had the Indian equities markets in their firm grasp as stocks got battered in the wake of rising inflation and the Reserve Bank of India raising key interest rates and hinting at more such tightening in the short-term.

In a truncated trading week, the 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), ended the week at 18,395.97 points, down 3.22 percent or 611.56 points from the previous week close of 19,007.53 points.

The 50-scrip S&P CNX Nifty of the National Stock Exchange closed 184.35 points or 3.23 percent lower at 5,696.5 points Friday.

Broader markets also saw huge losses with the BSE midcap index closing 4.08 percent down and the BSE smallcap index ending 4.47 percent lower.

There were only five gainers on the Sensex on a weekly basis: SBI, up 3.5 percent at Rs.2,618.55; NTPC, up 1.2 percent at Rs.191.80; Reliance Infra, up 0.9 percent at Rs.724.20; Tata Steel, up 0.7 percent at Rs.635.90 and ONGC, up 0.1 percent at Rs.1,135.60.

Major losers on the 30-scrip benchmark included DLF, down 12.2 percent at Rs.223.10; Hindustan Unilever, down 9.5 percent at Rs.272.45; M&M, down 8 percent at Rs.696.85 and Hero Honda, down 7.1 percent at Rs.1,657.45.

According to data available with the Securities and Exchange Board of India (SEBI), foreign institutional investors sold stocks worth $161.6 million during the week.

Other Asian stock markets closed mixed although traders were concerned with news of rating agency Standard and Poor’s downgrading the Japanese economy rating.

On a weekly basis, the Japanese Nikkei closed 0.84 percent higher at 10,360.34 points, while the Chinese Shanghai Composite index rose 1.38 percent to close at 2,752.75 oints.

However, Hong Kong’s Hang Seng shed 1.09 percent to end at 23,617.02 points.

Key indices of European stock markets ended the week on a sombre note as well. Britain’s FTSE 100 closed 0.25 percent down at 5,881.37 points, while the French CAC 40 moved 0.38 percent down at 4,002.32 points.

The German DAX settled 0.57 percent up at 7,102.8 points.

The US markets ended lower as investors grew nervous over continuing protests in Egypt as fears grew that the Suez canal could be closed as a result of the disturbance, sending oil prices higher.

The Dow Jones Industrial index closed 0.41 percent down for the week at 11,823.7 points and S&P 500 shut shop 0.55 percent lower at 1,276.34 points.

The Nasdaq index closed on a flat note at 2,686.89 points, down 0.1 percent.

Filed under: Economy

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