After respite for a week, the S&P BSE benchmark Sensex resumed its downward journey, tumbling almost 386 points to log more than four-months closing low of 18,450.23 during the first week of the new financial year as the market reeled under a slew of negative factors.
The market sentiment was dented by renewed fears of early general elections amid concerns over Q4 corporate earnings. Weak global cues following eurozone debt crisis and capital outflows also weighed heavily on the bourses.
Shares of FMCG, metal, teck, auto, IT, consumer durable, and capital goods firms declined sharply due to heavy selling from operators and investors.
However, shares of healthcare and refinery sectors firmed up on good buying enquiries. Small-cap stocks continued to remain in demand on heavy buying by retail investors. As a result, the S&P BSE-Smallcap index outperformed the Sensex and rose smartly by 1.89 %.
The 30-share Sensex resumed up at 18,890.81 and firmed up further to hit a high 19,060.51 after Finance Minister P Chidambaram reiterated the Government's commitment to additional economic reforms and pro-growth stance.
However, the BSE benchmark later succumbed to profit-booking following 2.5 % fall in February production of eight core sector industries. It dropped to 18,389.29 before ending the week at more than four-month low of 18,450.23, a loss of 385.54 points, of 2.05 %. Last week, the key index had gained 100.17 points, or 0.53 %.
The NSE's 50-share index Nifty also dropped by 129.30 points, or 2.28 %, to settle at 5,553.25.
Apart from poor core sector data, a HSBC survey too dampened sentiments. According to the survey, India's manufacturing sector witnessed the slowest rate of expansion in 16 months in March as power outages hampered production activity and new business orders declined.
"Current market movement is driven by global worries over mounting tension in the Korean peninsula and political situation on the domestic front. Market players are worried about the fate of some key pending bills, which could open some positives for Indian economy," said a report by UK-based advisory company Equentis Capital.
Private lenders, including ICICI Bank and HDFC Bank, fell on worries over loan growth amid subdued economic scene.
"FIIs too turned net sellers to the tune of Rs 825.88 crore in the last four trading sessions of the week which further weakened sentiments. Political uncertainties along with concerns over continuing slow growth in many segments of economy has led the investors to adopt cautionary approach and book profits on every rally," said Rakesh Goel, Senior Vice- President, Bonanza Portfolio Ltd.
Outside the benchmark indices, sugar stocks posted gains as Government partially decontrolled the sector by giving freedom to millers to sell the commodity in open market and removed their obligation to supply sugar at subsidised rate to ration shops. Shares of Andhra Sugar, Balrampur Chini, Oudh Sugar Mill and Uttam Sugar, among others, rose.
Ignoring the depressed market, Maruti Suzuki flared up by a hefty 9.86 % and emerged as the top gainer from the Sensex pack on the back of a weak yen which would boost the leading carmaker's margins by reducing the cost of imports.
21 scrips out of the Sensex pack ended in red while nine others finished in green.
Major losers from the sensex pack were Bharti Airtel (7.25 %), HDFC (6.68 %), ITC (5.71 %), Bajaj Auto (5.46 %), Tata Motors (5.20 %), Sterlite Ind (4.85 %), TCS (4.57 %), Icici Bank (4.53 %), Hero Motoco (4.11 %), Jindal Steel (3.86 %), Hindalco Ind (1.86 %) and Tata Steel (1.22 %).
However, Dr Reddy's Lab rose by 8.15 % followed by Sun Pharma 5.04 %, Wipro 4.03 %, Cipla 1.72 %, HUL 1.07 %, RIL 0.86 % and ONGC 0.83 %.
Among the major indices, the S&P BSE-FMCG fell by 3.30 % followed by S&P BSE-Metal 2.74 %, S&P BSE-Teck 2.62 %, S&P BSE-Auto 2.53 %, S&P BSE-IT 2.24 %, S&P Bankex 2.23 %, the S&P BSE-CD 2.18 % and S&P BSE-CG by 1.14 %.
The S&P Dollex-30 and the S&P Dollex-100 also dropped by 2.92 % and 2.80 % respectively.
However, the S&P BSE-HC and the S&P BSE-Oil&Gas rose by 2.50 % and 1.08 % respectively.
The total turnover at BSE and NSE rose to Rs. 8,699.64 crs and Rs. 45,345.87 crs respectively during the week as against the last weekend's level of Rs. 6,906.07 crore and Rs. 23,955.64 crore.