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Market Eye
| Weekly Wrap: Sensex turns Southward again | 15/11/2008 02:01:02 | he market got off to a good start last week (November 10 - 14) thanks to a massive stimulus plan announced by China. So upbeat was the sentiment that day that the Sensex shot up by nearly 575 points to end past 10,500.
But then, it turned out to be the only positive outing for the market in the truncated week, as it ended on a weak note on the other three sessions - the market was closed on Thursday on account of Gurunanak Jayanthi - due to a sharp drop in exports and investors' reluctance to pick up stocks ahead of assembly elections in five States and the crucial meeting of G20 political leaders to assess the crisis in global financial markets.
The fall in prices of several blue chip stocks on those three negative sessions was so sharp that the Sensex ended the week with a big loss of 578.87 points or 5.8% at 9385.42. The Nifty, which had gained points on Monday, ended the week at 2810.35 with a loss of 162.65 points or 5.5%.
Investors were not keen on picking up stocks even at lower levels last week despite a marked decline in inflation - the wholesale price index declined sharply to 8.98% in the week ended November 1, 2008, from 10.72% in the previous week - and better-than-expected industrial output in the month of September 2008.
It was a disastrous session for stocks on Tuesday as weak global sentiment and doubts over the effectiveness of the massive rescue package announced by China last weekend triggered a heavy sell-off across the board.
The marked decline in India's exports and fears of a sharp decline in growth in the next few quarters also weighed in to a significant extent that day. While the BSE barometer went down by 696 points, the Nifty lost around 210 points in that session. Realty, metal, power, capital goods, oil, IT and bank stocks suffered heavy losses.
The mood was not any significantly different on Wednesday. However, unlike in the previous session, the market witnessed a few sharp rallies from lower levels.
Still, none of them proved good enough to take the market up into the positive zone. The Sensex suffered a loss of over 300 points while the Nifty closed lower by around 90 points. The IIP numbers that turned out to be better than what the market had expected, failed to lift the sentiment.
A sharp drop in inflation and a firm trend in global markets did trigger some strong buying on Friday morning. But the market stayed in the positive territory for just about half an hour that day.
Doubts about the effectiveness of various bailout packages announced by governments across the globe and lack of participation by domestic institutional investors contributed to the market's fall. The resultant erosion in values of front line stocks drove the Sensex down by a little over 150 points. The Nifty ended 38 points down in the final session.
Some rating downgrades, decision of some top notch companies to defer their expansion programmes due to credit crunch and sustained selling by foreign institutional investors also contributed to the market's fall last week.
Among the stocks from the Sensex pack, only three stocks ended the week on a positive note. Tata Power (1.2%), Tata Consultancy Services (0.9%) and Bharti Airtel (almost flat) were the ones to end in green. From the Nifty index, Nalco (6.7%), Idea Cellular (2.6%), Cipla (1.9%) and Tata Communications (0.3%) closed in the positive territory.
Jaiprakash Associates went down by over 16%. DLF plunged 14.2%. Tata Motors declined by 13.8%. ACC eased by 12.6% to Rs 418.60. Mahindra & Mahindra and Maruti Suzuki lost 11.2% and 10.2% respectively. Larsen & Toubro slipped by over 9%.
BHEL, Tata Steel, HDFC, ICICI Bank, Reliance Infrastructure, Sterlite Industries, Wipro, HDFC Bank, ONGC, Hindalco, State Bank of India, Satyam Computer Services, Reliance Industries and Hindustan Unilever lost 5.5% - 9%. Reliance Communications, Infosys Technologies, ITC and Ranbaxy Laboratories also closed with sharp losses.
Suzlon Energy (down 22.7%) was the worst hit in the Nifty index. Zee Entertainment also went down by around the same margin as Suzlon. SAIL slipped by 18.8%. Unitech lost 10%. HCL Technologies, ABB, Reliance Power, GAIL India, Reliance Petroleum, BPCL, Punjab National Bank, Ambuja Cements and Power Grid Corporation also closed on a highly negative note last week.
Jai Corp, India Bulls Real Estate, IVRCL Infrastructure, Crompton Greaves, Lupin, Axis Bank, Thermax, Oracle Financial Services, Lanco Infratech, India Bulls Financial Services, India Infoline, Essar Shipping, Hindustan Construction Corporation, India Bulls Securities, BGR Energy, Bosch, Reliance Capital and GVK Power were among the major losers from BSE 'A' Group.
Tata Teleservices, Hindustan Zinc, Max India, Phoenix Mills, NMDC, Bajaj Financial Services, Glenmark Pharmaceuticals, Jindal Steel, OnMobile Global, Colgate Palmolive, CESC, MphasiS and Sun TV Network bucked the trend and posted impressive gains.
Among the sectoral indices, BSE Realty suffered the most as key stocks in the sector went down sharply on sustained selling pressure. The barometer ended with a huge loss of 14.14% last week. The Capital Goods index lost 8.96%. BSE Auto eased by 8.34%. The consumer durables index BSE CD declined by 7.37%. The Bankex lost 6.8% and the Power index drifted down by a little over 6%.
BSE Oil & Gas (down 5.51%), Metal (down 5.41%), IT (down 3.84%), PSU (down 3.78%), FMCG (down 3.15%) and Teck (down 2.87%) also ended sharply lower. The Healthcare index lost around a per cent. BSE Midcap slipped by 4.15% while the Smallcap barometer ended the week with a loss of 3.46%.
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