Market continues to reel under sell-off; Sensex slips 182 pts
Mumbai: The BSE benchmark Sensex started the week with a bang, spurting over 450 points, but soon lost momentum due to intense sell-off and dropped 182 points to end at 20,217, extending losses for the third straight week.
Selling in consumer durable, auto, pharma, FMCG and banking stocks kept the market under pressure while global developments weighed heavily on investor mind.
The Bombay Stock Exchange 30-share barometer resumed trading on a firm note and touched a high of 20,934.40 on the back of China's proposed economic reforms and hopes that the US stimulus programme would be extended.
Initially, the market got a boost after incoming US Federal Reserve chief Janet Yellen indicated the USD 85 billion monthly bond purchases would continue, raising hopes of higher capital inflows in India and other emerging markets.
The rupee, which strengthened against the dollar, also supported local equities, a broker said.
However, the Sensex fell to a low of 20,137.67 before concluding the week at 20,217.39, posting a fall of 182.03 points, or 0.89 percent, over the last weekend close.
The key BSE index has tanked by 979.42 points, or 4.62 percent, in the last three weeks.
The 50-share CNX Nifty of National Stock Exchange (NSE) also tumbled by 60.70 points, or 1 percent, to end the week below 6,000 mark at 5,995.45.
The market lost the positive momentum after mid-week when minutes from the Federal Reserve's last meeting signalled that the easy money policy may be rolled back in coming months as the world's largest economy shows signs of recovery.
The US central bank's bond-buying plan has been a source of liquidity for most Asian and emerging markets, including India, this year, and played an important role in fuelling periodic rallies on domestic bourses, which have witnessed new peaks in recent months.
"The Fed is looking to taper down its USD 85 billion monthly bond-buying as latest economic data suggests that employment situation in the US is improving," said Raghu Kumar, co-founder of RKSV, a broking company.
"If the (US) economy continues to improve as per expectations, we can expect the Fed to slowly begin tapering its quantitative easing."
Jignesh Chaudhary, Head of Research, Veracity Broking Services, said, "Equity markets shed the initial euphoria (when Sensex soared 453 pts on Monday - its biggest single day gain in a month) and traded a bit flat before receding into the bearish territory in the latter half of the week.
"FIIs lost their buying interest in the markets and resorted to selling as FOMC minutes highlighted that a lot of Fed officials were not averse to start the tapering process a bit earlier if there is positive economic growth in US."
"This caused ripples in the markets of emerging economies, including India. With no positive data inputs coming from domestic front and no new data scheduled to be released next week, the markets will follow the performance of their regional peers going forward," Chaudhary said.
"The bearish trend is expected to continue in the Indian equity markets and even technicals are suggesting the same thing. The CNX Nifty is expected to trade in 5,910-6,008 range in the coming week. If there is no improvement in market fundamentals, it might break the 5,900 level and trade below that," Chaudhary said.
Similarly, the Sensex is expected to trade in the range of 20,065-20,290. In absence of any positive news, it might break the 20,000 mark," he added.
Foreign Institutional Investors (FIIs) bought shares worth Rs 1,924.67 crore during the week, including provisional figure of November 22.
Among the 30 Sensex stocks, 19 declined, 11 firmed up.
Major losers during the week were SSLT (8.74 percent), Bajaj Auto (6.85 percent), Cipla (4.78 percent), Sun Pharma (4.07 percent), Tata Motors (3.29 percent), Hero MotoCorp (3.01 percent), ICICI Bank (2.69 percent), Coal India (2.32 percent), Tata Power (2.16 percent), ITC (1.94 percent), Wipro (1.43 percent), NTPC (1.41 percent), HUL (1.26 percent) and TCS (1.24 percent).
However, Tata Steel rose by 4.45 percent, Hindalco Inds (2.69 percent), L&T (2.61 percent), Gail India (2.56 percent), Maruti Suzuki (1.95 percent) and SBI (1.04 percent).
Among the S&P BSE indices, Consumer Durables dropped by 2.26 percent followed by Auto (1.97 percent), Health Care (1.87 percent), FMCG (1.33 percent), TECK (1.14 percent), Bankex (1.00 percent), IT (0.92 percent) and Metal (0.92 percent) while Capital Goods rose by 2.05 percent and Realty (0.41 percent).
The total turnover at BSE and NSE rose to Rs 9,680.45 crore and Rs 52,721.61 crore, respectively during the week from Rs 7,628.30 crore and Rs 43,582.81 crore.