Continued profit booking for the third day in succession took the benchmark Bombay Stock Exchange (BSE) index, the Sensex, below the 18,000 mark, as it lost 0.86%, or 155 points, to end the week at 17,924 points.
The Sensex this week has lost 505 points from the closing on Tuesday, while cumulatively, it has shed 366 points since last Friday’s closing. This is the first week this year when the Sensex has posted a net weekly loss.
Traders and analysts have welcomed the decline as they feel the Sensex had run up too fast and too high for comfort and will allow prospective investors to participate in the market.
“It’s a good thing that the market has corrected as this will generate buying interest among people who might have felt left out due to the recent rise,” said Deven Choksey, CEO and MD, KR Choksey Shares and Securities.
The Sensex, he adds, is likely to remain range bound for some time and will witness recovery with periodical correction.
Part of the reason for the correction is a cautious stance adopted by investors, observes Jagannadham Thunguntla, Strategist and Head of Research, SMC Global Securities. “The coming months are expected to be data-heavy months — the general budget, railway budget, election results and the RBI policy announcement — which is why investors are preferring to stay away from the market as January and February have given them substantial returns,” he said.
He however discounted the impact of rising crude oil prices in the market correction on Friday, terming it a “peripheral issue.”
The 50-share Nifty of the National Stock Exchange (NSE) also declined on Friday, losing 0.98%, or 54 points, to end the day at 5,429 points.