Sensex down 2.87

The Sensex ended last Friday at 16,643 points,down - 2.87 per cent compared to its closing level at the end of the previous week. It is currently trading at a price to earnings PE ratio of 21.46. Foreign institutional investors FIIs pumped in Rs 1,577.2 crore into Indian equities during the week.

According to Satkam Divya,chief executive officer,rupeetalk.com,The market fell this week because of sell-offs in IT,telecom and realty stocks. The strengthening of the rupee had an adverse impact on IT stocks as they earn most of their revenues in dollar. Telecom stocks suffered because of TRAIs statement that mobile service operators should shift from their current per-minute revenue charging regime to a per-second regime. This would adversely affect the revenue of mobile service operators. Realty stocks suffered because of the apprehension that interest rates might begin to move up. The RBI governor has already said that a change in monetary policy stance might have to be undertaken.

Among the sectoral indices that rose the maximum,FMCG rose 6.13 per cent while the Consumer Durables index rose 5.61 per cent. According to Divya,As telecom,IT,auto,bankex,PSU,Oil and Gas and other sectors were going down,these defensive sectors managed to hold their own. Among the sectors that fell the most were IT -7.25 per cent and Realty -2.62 per cent.

The two important events this week were the announcement of Infosys Q2 results and Reliance Industries granting bonus shares to its shareholders ahead of Diwali.

Next week,more companies will come out with their results and this will have an impact on the direction of the markets. Interest rate changes by central banks abroad could also affect foreign fund inflows and in turn the level of the markets.