Mumbai: In spite of last day surge by nearly 200 points on hopes of easing of euro-zone debt crisis, the BSE benchmark Sensex continued its south-bound journey for third straight week, tumbling another 319 points due to persistent selling pressure from operators on concerns over deficient monsoon and delay in key economic reforms.
Increased selling by foreign funds also weighed on the market sentiment. Foreign Institutional Investors (FIIs), for the first time in the current month, sold shares worth Rs 505.38 crore in the week, including provisional data of July 27, according to stock exchanges.
Heavy selling was seen across-the-board as 12 out of 13 sectoral indices closed down between 6.67 percent and 0.18 percent in the week with realty, capital goods, power, metal, PSU, banking and auto counters losing the mos. However, some FMCG and pharma stocks attracted buying support.
The Sensex rose sharply towards end of the week on heavy buying by funds, sparked by robust earnings from ICICI Bank amid firm global trends on account of European Central Bank (ECB)'s promise to contain the euro-zone debt crisis, cushioning the key index's fall to some extent.
The Bombay Stock Exchange 30-share index, right from the onset of the business, displayed a feeble trend as debt crisis in Spain again came to the fore, sparking off a fresh wave of risk-aversion across the globe. It dipped to more than 6-week low of 16,598.48 on Thursday.
However, the BSE barometer bounced back on the last day of the week to conclude at 16,839.19 after ECB President Draghi on Thursday gave an assurance to keep the euro-zone intact, but still closed with a net loss of 319.25 points, or 1.86 per cent. The Sensex has dropped by 681.93 points, or 3.89 percent, in the last three weeks.
The NSE 50-share Nifty also dropped by 105.25 points, or 2.02 percent, to end the week at 5,099.85. It has lost 217.10 points, or 4.08 percent, in the last three weeks.
Fears of rising inflation, driven by possible hikes in fuel and commodity prices, have stoked worries that Reserve Bank of India might keep key rates unchanged at its policy meet on July 31 even as the rain situation continues to be poor, a broker said.
The absence of speedier economic reforms even after the conclusion of Presidential election is a major worry for the bourses, he added.
The market was bearish till Thursday on profit-booking by operators and investors as July 26 was the last day of July contract. It also wanted to play safe ahead of the quarterly monetary policy to be announced by the apex bank on July 31.
FMCG giant HUL beat market expectations by doubling profits, which aided its share value to notch handsome gains of 4.23 percent in the week and was the top gainer from the Sensex pack. Cigarette major ITC, another top heavyweight, was also on the buying list as Q1 results were as per market expectations and the scrip closed up by 0.59 percent.
According to market participants, the market may open higher on Monday after Wall Street on Friday showed sharp gains with the Dow Jones Industrial Average closing above 13,000-mark, up 1.46 percent, for the first time since May 7, 2012. Tech-laden Nasdaq Composite Index spurted 2.24 percent, expecting positive moves by the ECB and US Federal next week.
Second-line stocks underperformed the Sensex, indicating pulling out by retail investors in the current uncertain global as well as domestic scenario. As a result, the BSE- Midcap and BSE-Smallcap slumped by 4.80 percent and 4.76 percent, respectively.
Analysts said that the Sensex and Nifty, both are now just below long-term 200-DSMA (200 days simple moving average) and RBI monetary policy review, progress of monsoon and next batch of corporate earnings will determine the future direction of the market.
Overall 23 out of 30 sensex-based scrips closed in the red while others finished with gains. SBI was the top loser from the index with a fall of 9.06 percent followed by BHEL (9 percent), Wipro (7.92 percent), Jindal Steel (7.49 per cent), L&T (5.04 per cent), Tata Power (4.97 per cent), Tata Motors (4.72 percent), Tata Steel (3.97 percent), Sterlite Ind (3.90 percent), Hindalco (3.73 percent), Hero MotoCorp (3.72 percent), Infosys (3.10 percent), Maruti Suzuki (2.96 percent), GAIL (2.72 percent), Bharti Air (2.31 percent), M&M (2.27 percent), Coal India (2.01 percent), ONGC (1.63 percent), HDFC (1.51 percent), NTPC (1.80 percent) and ICICI Bank (0.73 percent).
Among the sectoral indices, the BSE-Realdy plunged by 6.67 percent, BSE-CG by 6.45 percent, BSE-Power by 5.09 percent, BSE-Metal by 4.50 percent, BSE-PSU by 4.36 percent, Bankex by 3.40 percent and BSE-Auto by 3.10 percent, while BSE-FMCG rose by 0.82 percent.
The total turnover at BSE and NSE was Rs 9,961.41 crore and Rs 49,129.43 crores respectively as against the last weekend's level of Rs 9,534.90 crores and Rs 43,284.09 crore.