Sensex loses steam, ends 2.33 per cent lower

Bearish trends seem to be gaining at the Indian equities markets with a benchmark index shedding 2.33 percent in the week and posting its worst weekly performance since October.

Bearish trends seem to be gaining at the Indian equities markets with a benchmark index shedding 2.33 per cent in the week and posting its worst weekly performance since October.

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The government's announcement in its mid-year fiscal review that the economic growth could exceed 7.75 per cent in 2009-10 failed to enthuse investors in the midst of rising inflation and food prices, which could result in the Reserve Bank of Indian raising policy rates soon.

The 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) has shot up more than 73 per cent in 2009, helped by increased foreign fund inflows, but now seems to be losing steam.

The Sensex closed the week 399.2 points or 2.33 per cent lower at 16,719.83 points, from the previous week's close at 17,119.03 points.

The broader S&P CNX Nifty of the National Stock Exchange (NSE) slipped 2.53 per cent or 129.6 points from its last weekly close to end at 4,987.7 points.

Broader market indices too reflected the bearish sentiments, though not to the extent of the leading indices. The BSE midcap index ended 1.58 per cent down and the BSE smallcap index fell 1.04 per cent.

The losses were led by weakening appetite in heavyweight stocks like Reliance Industries, HDFC Bank, DLF and SBI.

The benchmark indices Monday started on a weak note, which continued through the week and only once gained modestly Wednesday.

Tuesday and Friday saw heavy drops with the Sensex losing 1.29 per cent and 1.03 per cent respectively while the Nifty shed 1.42 per cent and 1.07 per cent respectively.

The week also saw BSE and NSE announcing that the opening bell would be advanced at both the bourses to 9 a.m. and increase trading hours by 55 minutes - but from Jan 4 instead of Dec 18.

The move, however, left stakeholders, including brokerages and investors divided, with some even calling the move autocratic and not beneficial to anybody.

According to Jagannadham Thunuguntla, the equity head for brokerage firm SMC Capitals, many large brokers were geared for the additional trading hours, but the smaller players needed time to adjust and adapt.

"If India has international aspirations, they might as well go for such realignments even though for brokerage houses it will mean more overheads like more personnel and longer man hours that need to be compensated," said Thunuguntla.

Data with markets watchdog Securities and Exchange Board of India (SEBI) showed that foreign funds were net buyers during the week, having bought scrips worth $210.08 million.

The top gainers in the Sensex were Ranbaxy Labs (up 6.5 per cent), ACC (up 5.5 per cent), Cipla (up 4.7 per cent), Wipro (up 4.7 per cent) and Tata Motors (up 3.1 per cent).

Among the top losers were HDFC Bank (down 6.8 per cent), DLF (down 6.7 per cent), ICICI Bank (down 6.4 per cent), Reliance Industries (down 5.9 per cent) and SBI (down 5.3 per cent).