The Hindu Business Line : Market this week

On Monday the Sensex lost 191 points in the opening trade and touched an intraday low of 13,277.96 before closing at 13,330.51, down by 139.34 points from its previous close. Investors turned extremely cautious in the wake of the continuing political crisis,rising inflation and weak global cues.

Ranbaxy stock was hammered after news that the US Justice Department has filed a motion in a federal court alleging that the company forged documents relating to an investigation into the quality of its drugs sold in the US. The other losers were TCS, HDFC, BHEL, Hindalco, HDFC Bank, Wipro and ACC.

Stocks nosedived on Tuesday driving the Sensex down to 12,676.The Sensex shed 654.32 points, falling 4.91 per cent. The Nifty fell by 4.42 per cent to close at 3861.10.

FIIs were net sellers to the tune of Rs 702.7 crore, while the domestic institutions were net buyers for Rs 283.4 crore, according to data on NSE.

Frontline banking stocks dipped significantly on Tuesday, as investors relentlessly sold due to macro economic concerns. All the 16 stocks in the banking index declined, as the BSE Bankex shed 7.75 per cent.

Ranbaxy Laboratories shares were battered for the second consecutive day, down 14 per cent on Tuesday, amidst concerns of action from the United States Department of Justice.The stock plunged by Rs 122 or 23 per cent on the BSE in the last two trading sessions as against a closing price of Rs 531.45 recorded on Friday, the 11th of July.

On Wednesday profit-booking pared early gains in the Sensex,which declined to a new 52-week intraday low and finished at its lowest in over 16 months. The Sensex, fell 100.39 points to end at 12,575.80.

Shares of Cairn India and Reliance Petroleum slumped on Wednesday even as international crude price closed down $6.44 at Rs 138.74-a-barrel on Tuesday, a steep fall on a single day.

Crude was hovering around $134.05, a drop of 3.39 per cent over Tuesday's close.

Cairn was down Rs 11.50 or 4.88 per cent and closed at Rs 224.35; Reliance Petroleum dropped 4.8 per cent or Rs 7.75 and closed at Rs 153.75.

Even as the worst seemed to be over for the capital markets, more trouble seems to be lying ahead for the real estate sector, as it is showing signs of a slowdown.

While the BSE Sensex was down by only 0.79 per cent on Wednesday, the BSE-Realty lost 6.31 per cent – the biggest loser among sectoral indices.

On Thursday, refreshingly, falling crude prices, positive global sentiments and short-covering drove the Sensex up 4.26 per cent. The index gained 536.05 points to close at 13,111.85. The Nifty was up by 3.42 per cent, at 3,947.20.

While the Sensex was up 536 points, the Metal Index was down 2 per cent. Steel stocks were down,ranging between 3 per cent and 6 per cent.

It is reported that the Government might put in place a price band for steel products, which will prevent the steel companies from hiking prices of their products beyond a stipulated ceiling, in order to try to control inflation.

On Friday the Sensex recorded an impressive gain of 523 points and ended the day at 13,635.40 after touching a high of 13684.27 and a low of 13093.34. The Nifty rose 145.05 points and closed at 4092.25 after hitting a high of 4110.55 and a low of 3926.30.

The major contributors were ICICI Bank, HDFC, HDFC Bank, Jaiprakash Associates, Bharti Airtel.

Satyam Computers, Wipro, HCL Tech and Infosys suffered sharp losses on heavy selling by traders.

The inflation, which was at 11.91 per cent for the week ended July 5th, was well below market expectation. Incidentally, the inflation figures were released on Thursday evening as against the customary Friday noon releases. This augured well for the markets.

Compiled by S. Vasudevan

Podcast by R. Venkatesan and S. Vasudevan

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