Bearish sentiments dominated the market for a second straight week as both key indices, Sensex and Nifty, closed at the current year's low of 19,494.77 and 5,903.50, respectively, due to persistent selling on worries over economic growth and tepid corporate earnings.
The market dropped on the first day of the week and it remained in negative terrain for the rest of the days as operators and investors preferred to book profits as concerns over the PSU disinvestment and reduction of promoter stake in the companies to meet the Securities and Exchange Board of India's (SEBI) guidelines dented sentiments.
To meet SEBI's mandated minimum public shareholding of 25% for private companies and 10% for state-run firms, the promoters will have to sell their extra holdings in the market which will result in additional supply of equities in the market for the next few months.
This would result in stable to weak movements in share values in the near future, a broker said.
Selling was seen almost across-the-board as 11 of the 13 sectoral indices closed with losses between 1.93% and 5.16% with consumer durable, PSU, metal, power, refinery, realty and capital goods scrips suffering the most. Only BSE-IT and BSE-Teck finished in the green.
The market got a further jolt after Central Statistics Office (CSO) on Thursday said the country's economic growth rate this fiscal is estimated to be sharply lower at 5%, a decade low, as against 6.2% in FY12.
The Bombay Stock Exchange (BSE) sensitive index opened higher at 19,860.97 and hovered in a wide range of 19,902.60 and 19,414.80 before finishing the week at 19,494.77, showing a net loss of 286.42 points, or 1.45%, over the last week's close.