Sensex tumbles on weak domestic cues

The markets remained weak throughout last week and ended below the 9,000 mark at 8,843.21 points. The Sensex tumbled 8.2 per cent,shedding 791.5 points from its previous week’s close.....

Written by Niti Kiran | Published: February 23, 2009 2:29 am

The markets remained weak throughout last week and ended below the 9,000 mark at 8,843.21 points. The Sensex tumbled 8.2 per cent,shedding 791.5 points from its previous week’s close. “Markets had ended in the positive the week before on account of positive expectations from the vote of account,but the latter caused a lot of disappointment in the markets. Moreover,the US stock markets continued to weaken. So overall events in both national and the international markets were disappointing,” says V.K. Sharma of Anagram Stock Broking. Foreign institutional investors (FIIs) were net sellers last week,accounting for an outflow of Rs 1,669.1 crore from the equity market.

Further softening of inflation,which slid to 3.92 per cent for the week ended February 7 as compared to 4.39 per cent the previous week,failed to enthuse investors. Taking cue from the equity markets,the yellow metal scaled new highs. It ended the week at Rs 15,501 per 10 gram,surging almost 5.9 per cent during the week.

All sectors ended last week in the red. Banks and metals were battered the most during the week,declining 14.4 per cent and 11.2 per cent respectively. Auto and FMCG held their ground,declining by a mere 2.6 per cent and 1.4 per cent compared to the previous week. “Expectations of further rate cuts,which did not materialise,took a toll on the banking sector. Besides,most of the sectors had rested their hopes on the vote of account,which were eventually dashed,” adds Sharma.

Last Friday,the Dow Jones Index closed at a six-year low,a development that doesn’t bode well for the Indian stock markets as well. “As the Dow Jones is trading at a six-year low,there is a tendency for the market to trade at lower levels. The Sensex is expected to reel under pressure for quite some time,” points out Sharma.

— Niti Kiran

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