Mumbai: Sensex today tanked over 388 points on frantic selling by funds in heavy-weight stocks, including banking, automobile and technologies, making it the worst week for investors in the last seven months.
The 30-share Sensex lost 388.78 points, or 2.77%, to settle at 13,632.53, on concerns that the government might take measures, including a ban on cement exports in the budget next week to tame inflation.
The key-index lost about 770 points in the last four trading sessions in a row, as most of the index-related stocks in bank, auto and technology segments melted on selling by foreign funds as well as general investors.
The index tumbled 5.4% this week, its biggest weekly decline since the week ended 21 July.
The wide-based National Stock Exchange index, Nifty, dropped by 101.05 points at 3938.95.
The major draggers were Grasim Industries, ACC, Bajaj Auto, Maruti Udyog, Satyam Computers, Infosys Technologies and ITC Ltd.
They said sentiment was also dampened on reports that no major tax reforms were expected from the next week’s federal budget.
The 30-share BSE Sensex index fell as much as 453.23 points to a day’s low of 13,568.08 before recovering marginally to close at 13,632.53, down 388.78 points.
The Sensex dropped to its lowest level in over five weeks, last closing below the 14,000 points level on 11 January at 13,630.71.
Software and banking stocks were hardest hit.
“The markets showed nervousness ahead of the budget, with an absence of fresh buying at lower levels. With interest rates high, there are fears that fund flows to the emerging markets may slowdown,” said Hiten Mehta, fund manager with Fortune Financial Services.