Mumbai: The market corrected after two-weeks of gains as the benchmark sensex tumbled by nearly 400 points during the week under review on selling in the frontline counters.
This week Bombay Stock Exchange 30-share barometer moved in a range of 17,275 and 16,693.06 before concluding at 16,719.83, a steep fall of 399.20 points or 2.33% over its preceding weekend’s close.
The 50-issue Nifty of the National Stock Exchange too slumped by 129.60 points or 2.53% to settle the week at 4,987.70 from its last weekend’s close.
Marketmen said profit-booking emerged after inflation trebled to 4.78% in November. Investors fear Reserve Bank in its attempt to arrest rising prices might adopt tighter monetary measures which could lead to higher interest rates.
“Market was expecting an inflation of 4.1-4.2%. But the inflation numbers came as a shock and the banking as well realty stocks plunged sharply,” said Ashika Stock Brokers Research head Paras Bothra.
From the sectorial indices, Health Care and IT stocks were in keen demand and escaped selling amid hopes that there would be spurt in outsourcing from developed economies in the wake of signs of economic recovery in the US.
Market shrugged off reports of higher advance tax payments by India Inc, which indicated robust quarterly performance.
The top heavyweight and petro-chem giant, Reliance Inds (RIL) suffered a sharp setback and dropped by 5.47%, contributing the sharp fall in index.
From the Sensex pack, HDFC Bank plunged by 6.64%, REL Com by 6.51%, DLF by 6.39%, ICICI Bank by 6.31%, Sterlite Ind by 5.47%, SBI by 5.33%, HDFC by 4.37%, Bharti Airtel by 4.30%.
However, rise in Tata Motors, Tata Steel, Infosys Tech, TCS, Wipro, ACC, M&M and Sun Pharma cushioned the fall to some extent, otherwise it would have been much more pronounced.
World stocks displayed a feeble trend after US Federal Reserve at the end of a two-day policy meeting on Wednesday detailed its plans to remove excess liquidity.
The market was worried that the RBI might hike rates even before the January policy meet as food inflation touched 19.95% as of 5 December, has become a hot political issue which even stalled Parliament proceedings earlier this week.
However, majority of marketmen are not much worried as they attribute the fall to year-end selling by FIIs ahead of Christmas and new year season. Hightech Securities director Sanjeev Bhambri opined that “the market may face more pressure in the short-term but the long-term looks bullish.”
During the week, the trading volume on the BSE and NSE remained low at Rs21,891.70 crore and Rs66,754.71 crore compared to last week’s turnover of Rs24,675 crore and Rs72,890 crore respectively.