Sensex falls 263 points last week; Realty, Oil & Gas, IT plunge - The New Indian Express

Sensex falls 263 points last week; Realty, Oil & Gas, IT plunge

Published: 13th October 2012 08:18 AM

Last Updated: 13th October 2012 08:18 AM

Indian markets turned bearish this week with the benchmark indices falling over 1%. Global markets were also not supportive. The market fell sharply on Monday as the investors preferred to book profit at higher level. Standard and Poor"s warning on possible sovereign rating downgrade for India has not gone well with the market on Wednesday. However, the markets recovered in the next session after the Finance Minister P Chidambaram dismissed possibility of rating downgrade and promised more reforms initiatives in the next two years. But weak guidance from IT major Infosys drag the markets lower on Friday. IIP numbers though came above estimates failed to cheer market. There are lesser expectations in the market for rate cut in coming monetary policy this month. The 30-share index, Sensex declined 263.28 points, or 1.39% over previous week to 18,675.18. On the other hand, the broad based NSE Nifty dropped 70.90 points, or 1.23%, to 5,676.05. Meanwhile, BSE Mid and Small-cap fell marginally by 0.03% and 0.5% respectively. Sectoral indices at the BSE showed a divergent trend. Top losers were BSE Realty (4.10%), Oil & gas (3.49%), IT (3.08%), Teck (2.92%), Power (2.47%), Auto (2.08%), PSU and Capital goods down (1.44%) and Bankex (0.95%). However, BSE Healthcare (1.93%), FMCG (1.94%), Consumer durables (0.48%), and Metal (0.13%) gained for the week."Indian stocks have been swinging back and forth lately after the NSE Nifty crossed 5700, which was driven by a slew of economic reforms and strong FII inflows. But, after a stupendous run of gains, market participants seem to be taking a breather of sorts to examine the latest quarterly results. Also, fiscal deficit, trade deficit and current account deficit continue to be major problems for India. S&P has reiterated its warning on deficits this week. Hence, the real reform, to control ballooning fiscal deficit, is yet to happen. The RBI too is waiting for more meaningful steps to contain the budget gap before easing its monetary policy," said Amar Ambani, Head of Research IIFL. "So, one should not get carried away by the recent rally and reforms, as a few economic headwinds are yet to be conquered. The global situation too is far from satisfactory, with the eurozone leaders continuing their struggle to quell a three-year-old debt crisis. China has witnessed a sharp slowdown while the US too is likely to face problems once the measures to rein in fiscal deficit are in place next year. The uncertainty over the outcome of the US presidential election is another near-term overhang that needs to be taken into account," Ambani added.Inflation data shall be released on October 15and has to be closely watched. Q2FY13 results have started and shall be in focus for deciding further market trend.

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