Mumbai: Bearish sentiments dominated the market for a second straight week as both key indices, Sensex and Nifty, closed at the current year's low of 19,494.77 and 5,903.50, respectively, due to persistent selling on worries over economic growth and tepid corporate earnings.
The market dropped on the first day of the week and it remained in negative terrain for the rest of the days as operators and investors preferred to book profits as concerns over the PSU disinvestment and reduction of promoter stake in the companies to meet the Securities and Exchange Board of India's (SEBI) guidelines dented sentiments.
To meet SEBI's mandated minimum public shareholding of 25 percent for private companies and 10 percent for state- run firms, the promoters will have to sell their extra holdings in the market which will result in additional supply of equities in the market for the next few months. This would result in stable to weak movements in share values in the near future, a broker said.
Selling was seen almost across-the-board as 11 of the 13 sectoral indices closed with losses between 1.93 percent and 5.16 percent with consumer durable, PSU, metal, power, refinery, realty and capital goods scrips suffering the most. Only BSE-IT and BSE-Teck finished in the green.
The market got a further jolt after Central Statistics Office (CSO) on Thursday said the country's economic growth rate this fiscal is estimated to be sharply lower at 5 percent, a decade low, as against 6.2 percent in FY12.
The Bombay Stock Exchange (BSE) sensitive index opened higher at 19,860.97 and hovered in a wide range of 19,902.60 and 19,414.80 before finishing the week at 19,494.77, showing a net loss of 286.42 points, or 1.45 percent, over the last week's close.
The 30-share Sensex has lost over 619 points, or 3.08 percent, in the last two weeks on profit-booking in bluechips due to poor growth prospects and fiscal health worries.
The NSE 50-share Nifty dropped by 95.40 points, or 1.59 percent, to end the week at 5,903.50. It has lost nearly 171 points, or 2.82 percent, in the last couple of weeks.
Resurfacing of the euro zone worries also affected the domestic market to some extent.
Shares of second-line companies declined sharply on renewed selling pressure from retail investors. The BSE- Smallcap and BSE-Midcap indices fell 3.72 per cent and 3.04 percent, respectively, underperforming the Sensex.
However, ignoring the weak trend IT stocks attracted good buying interest after release of higher US jobs and manufacturing data that boosted optimism in the world's largest economy. Indian IT companies earn a major part of their revenue from exports to US.
As a result, TCS rose by 5.71 percent, Wipro by 0.90 percent and Infosys gained 0.63 percent.
Sun Pharma was up 3.37 percent after the drugmaker announced 31.87 percent rise in Q3 net profit on Friday and also because the US health regulator approved the company's generic version of ovarian cancer drug, Doxil.
Kishor P Ostwal, CMD, CNI Research Ltd said, "Indian market hit another low with unconvincing volumes. GDP below 5 percent was not appealing. It seems the market is scared of the Budget."
"Benchmark indices may turn volatile in the coming days amid various economic data to be announced. The IIP numbers and Inflation (WPI) will be announced next week," said Amar Ambani, Head of Research, IIFL.
Foreign Institutional Investors (FIIs) continued its buying spree by investing net Rs 15,094.20 crores during the week (including 9.5 percent sale of the equity capital of NTPC by way of Offer for Sale (OFS) through the stock exchanges mechanism on Thursday), comprising provisional figure of February 8 as per data issued by the stock exchanges.
From the 30-share Sensex pack, 23 scrips ended in losses while seven others finished with gains.
Major losers from the sensex pack were Sterlite Ind (9.56 percent), Cipla (7.92 percent), BHEL (7.48 percent), ONGC (5.72 percent), NTPC (5.58 percent), Tata Power (5.41 percent), SBI (5.12 percent), Hero MotoCo (4.92 percent), Dr Reddy's Lab (4.63 percent), Coal India (4.57 percent), Tata Steel (3.51 percent), ICICI Bank (3.50 percent) and Hindalco (3.26 percent) while Other gainers were HDFC 3.77 percent, and) and HDFC Bank 1.48 percent.
Among the sectoral indices, the BSE-CD dropped by 5.16 percent, BSE-PSU 4.67 percent, BSE-Metal 4.35 percent, BSE-Power 4.25 percent, BSE-Oil&gas 3.82 percent, BSE-Realty 2.70 percent, BSE-CG 2.64 percent, BSE-HC 2.54 percent, Bankex 2.50 percent and BSE-FMCG 1.93 percent.
However, the BSE-IT index rose by 1.73 percent and BSE-Teck by 0.68 percent.
The total turnover at the BSE and NSE dropped to Rs 9,379.44 crore and 57,529.99 crore respectively from Rs 11,457.89 crore and Rs 66,110.11 crore last week.