The BSE benchmark Sensex snapped a five-week winning spree by tumbling 263 points to close at 18,675 during the current week on fresh selling following downgrade warning to India from a top global rating agency despite the government unleashing a wave of economic reforms to boost growth and revive investor sentiment.

Standard & Poor’s (S&P) on Wednesday said there is a “one in three” change of a downgrade of the country’s sovereign rating to junk status in the next two years.

The news came after International Monetary Fund (IMF) slashed the third-largest Asian economy’s growth forecast for 2012 to 4.9 per cent from 6.1 per cent projected earlier, due to low business confidence and “sluggish structural reforms”.

The market got a further jolt due to disheartening revenue and earnings guidance in rupee terms for the current fiscal given by IT bellwether Infosys in its quarterly results announced on Friday.

Infosys posted 24.3 per cent jump in consolidated net profit at Rs 2,369 crore for Q2. The Bangalore-based software exporter lowered its revenue growth guidance for the current fiscal to 17.3 per cent from earlier target of 19.7 per cent.

The Sensex resumed higher at 18,969.19, but declined afterwards to 18,581.49 before settling the week at 18,675.18, showing a loss of 263.28 points, or 1.39 per cent, from its last weekend’s level. The 30-share index had gained 1,508.90 points, or 8.65 per cent, in the last five weeks.

The NSE 50-share Nifty dropped by 70.90 points, or 1.23 per cent, to finish at 5,676.05. It had gained 488.45 points, or 9.28 per cent, in the last five weeks.

Related Topics
comment COMMENT NOW