The key indices,Sensex and Nifty,plunged more than 9 per cent for the week as the Union Budget disappointed investors who had high hopes of economic reforms from the Budget.
Another key factor for the markets’ debacle in the week was the sustained pull out by foreign institutional investors (FIIs) on increased possibility of rating downgrades by the leading rating agencies,including Standard & Poor’s (S&P) which made a cautionary statement on India’s sovereign rating.
The markets stayed highly volatile throughout the week amid positive and negative developments.
In the week to July 11,the Bombay Stock Exchange (BSE) ended at an eight-week low of 13,504.22 points,with a net fall of 1,408.83 points or 9.45 per cent,from its last week’s close.
Similarly,the Nifty tumbled 420.35 points,or 9.50 per cent,to settle the week at 4,003.90 points from its close last week.
Investors were disappointed mainly because of the absence of the anticipated major economic reforms in the Budget which set the fiscal deficit high at 6.8 per cent for 2009-10.
Meanwhile,IT bellwether Infosys Technologies announced better-than-expected first quarter results,beating the market projections of a fall in its consolidated net profits.