Sensex takes 130 point plunge

The Sensex shed 192.13 points for the week. From its all-time high of 6,954.86 touched in the intra-day trades on March 9, the Sensex has lost 800.42 points, or 11.50 per cent.

The NSE S&P CNX Nifty index lost 38.80 points to end at 1,902.50. For the week, the broader index lost 64.85 points.

The market opened weak and lost further ground as trading progressed. Selling pressure intensified in the afternoon after Hindustan Lever announced its quarterly results. With no fresh buying coming in at the lower levels, the market eventually ended with a huge loss.

Said BSE dealer Venkat Aiyer, “Worries over the high interest rate regime rattled the market.” In its annual Credit Policy, the Reserve Bank of India on Thursday hiked the reverse repo rate — the rate at which banks park their surplus funds with the RBI — by 25 basis points to 5 per cent.

The decision is a clear signal that the interest rate cycle may have turned.

The outflow from the foreign funds also weighed on the sentiment. FIIs pulled out Rs 133.90 crore on Wednesday (April 27) after remaining net sellers of Rs 55.50 crore on Tuesday (April 26). After making huge purchases in the first three months of the year, FIIs have turned net sellers in April, having already sold shares worth Rs 328.90 crore so far.

Hindustan Lever (down 4.18 per cent to Rs 137.40) ended sharply lower — coming off its day’s high of Rs 145 – on selling at higher levels after the company posted quarterly numbers that fell short of expectations. Banking stocks traded mostly lower.

The BSE Bankex ended 104.13 points, or 2.89 per cent, lower at 3,504.33. Banking sector blue chips ICICI Bank (down 3.79% to Rs 360.90), State Bank of India (down 3.51% to Rs 583.05) and HDFC (down 2.40% to Rs 730.85) lost ground amid fears that rising bond yields may affect the banks’ profits. Bank of India (down 4.52% to Rs 82.40) also declined — coming off its day’s high of Rs 87.90 — on selling at higher levels after the company announced quarterly results.

Other heavyweights ONGC (down 2.86% to Rs 811.50), Reliance Industries (down 3.15% to Rs 525.55) and ITC (down 0.52% to Rs 1,444) also contributed to the weakness of the key stock indices. Oil and gas stocks also declined. The BSE Oil & Gas Index ended 77.27 points, or 2.57%, lower at 2,931.98. PSU oil refining/marketing stocks HPCL (down 4.75% to Rs 303), BPCL (down 2.13% to Rs 347.25), Indian Oil (down 1.13% to Rs 439) and IBP (down 0.54% to Rs 523) declined after the Petroleum Minister Mani Shankar Aiyer said on Thursday that there was no immediate move to raise retail petrol and diesel prices.