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Tuesday, July 17, 2018

Sensex posts biggest weekly loss in 2012

The BSE Sensex fell 127 points to 16,292.98 points

Written by ENS Economic Bureau | Mumbai | Published: May 12, 2012 2:49:36 am

Dalal Street fell for a fourth straight session to its lowest close since January 16,led by continued selling in blue chips after a contraction in industrial production weighed on a market already grappling with global risk aversion. The BSE Sensex on Friday fell 127 points to 16,292.98 points — down 3.2 per cent,or 538 points for the week,marking its biggest weekly fall since mid-December and its third consecutive weekly loss.

The decline in industrial production came as a jolt to the market. India’s industrial output unexpectedly contracted 3.5 per cent in March from a year earlier. The data come on a day marked by drops in Asian stock markets because of JPMorgan’s $2 billion loss from a failed hedging strategy and a set of unexpectedly weak data from China.

Some hope for monetary easing at the RBI’s policy meeting next month did help support markets. Goldman Sachs said India’s weak output data,along with stable core inflation,increased the probability of further rate cuts.

Besides,comments from RBI deputy governor Subir Gokarn that the “tendency” for interest rates was “downward”,despite its concerns about inflation,also raised those hopes.

“Negative IIP data is surprising. It has added fuel to already disappointed market. An upside in market is restricted further. The government has no options but to take stern actions,” said Vijay Kedia,Director,Kedia Securities.

Dipen Shah,Head of Fundamental Research,Kotak Securities,said,“The weaker-than-expected IIP number for March had an impact on the markets on Friday. The clarification on GAAR earlier in the week and the RBI directive to exporters to convert 50 per cent of their exports into INR only temporarily improved the sentiments during the week. Markets have been suffering because of lack of reforms initiatives on the one hand and the global concerns on the other.”

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