press trust of india
MUMBAI, 15 JUNE: In spite of last day recovery on hopes of rate cut from the Reserve Bank of India, both the key indices, S&P BSE benchmark S&P Sensex and Nifty ended in the red by over one per cent for the second consecutive week on persistent selling pressure following fall in the rupee value to an all-time low.
Fresh capital outflows also affected the market sentiment as foreign institutional investors (FIIs) sold shares worth Rs 2,515.68 crore during the week, including the provisional figure of 14 June. Shares of consumer durable, metal, realty, power and PSU sectors declined sharply on selling pressure from operators.
The benchmark S&P BSE Sensex resumed higher at 19,530.35 and moved up further to 19,585.75 on select buying mainly in IT sectors in view of depreciation of rupee value to lifetime low of 58.98 against the dollar.
However, it later turned negative and dropped to a low of 18,765.53 on profit-booking before recovering on the last day to end the week at 19,177.93, still showing a loss of 251.30 points or 1.29 per cent. It has lost 582.37 points or 2.95 per cent in the last two weeks.
The NSE 50-share Nifty also dropped by 72.60 points or 1.23 per cent to finish at 5,808.40.
Markets recovered at the end of the week due to fag-end buying on expectation of rate cut by the RBI in view of fall in inflation after WPI inflation fell to over three-and-half-year low to 4.7 per cent in May.
Finance minister Mr P Chidambaram’s comment that the government would announce steps soon to boost investment and growth also supported the market during the fag end of the week.
Lower inflation on account of declining prices of manufactured items and recent weak IIP data boosted hopes of monetary action by the RBI on 17 June traders said. The retail inflation (CPI) declined to 9.31 per cent in May from 9.39 per cent in April while industrial output growth (IIP) slowed down to two per cent in April this year from the revised 3.4 per cent in last month.
“Rupee’s sudden depreciation has led to some outflows and correction in the equity markets as well,” said Mr Lalit Thakkar, MD-Institution, Angel Broking.
Twenty shares out of the 30-share Sensex pack ended lower while 10 shares finished with gains.
Major losers from the Sensex pack were Jindal Steel (13.21 per cent), Tata Power (8.68 per cent), BHEL (7.06 per cent), Sterlite Ind (6.85 per cent), Tata Steel (6.11 per cent), Coal India (5.92 per cent), Sun Pharma (5.90 per cent), TCS (4.78 per cent), Hero Honda (2.66 per cent), ONGC (2.52 per cent) and M&M (2.03 per cent).
ALL EYES ON MONDAY’S RBI POLICY
– 10 June: The Sensex surrenders its gains to close just 12 points higher at 19,441.07, on profit-booking as the rupee at an all-time low was seen preventing the RBI from cutting interest rates on 17 June
– 11 June: The Sensex sinks by 298 points to close at nearly a two-month low level of 19,143 as a steep fall in rupee almost killed rate cut hopes
– 12 June: Slowdown in industrial production and higher-than-expected retail inflation pulls Sensex down by 102 points to end at 19,041.13, extending losses for the second day
– 13 June: A rout in world markets sends the Sensex 214 points down to end below the 19K-mark at 18,827.16, even as the finance minister Mr P Chidambaram says more reforms are on the anvil
– 14 June: Rebounding from two-month lows, the Sensex surges by 351 points to end at 19,177.93, as slowing inflation and strengthening rupee rekindled hopes of a rate cut by the RBI on Monday