Mumbai: The key indices, bellwether Sensex and Nifty, shed another four per cent over the week as markets impressively cut early losses after Prime Minister Manmohan Singh’s reassuring statement on growth that strengthened possibility of fresh rate cuts.
Analysts said the market is expected to continue its weekend recovery next week if the Reserve Bank announced fresh monetary measures as anticipated after inflation fell further to 8.90% for the week ended 8 November.
The market, however, will continue to be volatile in the new week in view of the expiry of derivatives contract, which is likely to trigger short-covering.
The global developments, with heightened worries about a protracted recession after more news about write-downs and job cuts caused by the lingering financial crisis, will continue to influence local equity markets.
Touching a low of 8,316.39 on Thursday, the Bombay Stock Exchange 30-share index later recovered nearly 70% of losses to settle the week at 8,951.21, a loss of 434.21 points, or 4.63%, from last weekend’s close.
Similarly, the broader 50-share Nifty of the National Stock Exchange ended the week down 116.90 points, or 4.16%, at 2,693.45 from its previous weekend’s close.
The market cut short its seven-session long falling string in which Sensex had lost about 2,220 points or 21%, largely because of the PM’s confidence that the economy would grow by 8%.
He said the government will resort to fiscal, monetary, exchange rate and public spending instruments to neutralise the impact of the global meltdown and recession in the West.