Sensex extends decline on sustained capital outflows

| | Updated on: Feb 12, 2011

The BSE benchmark Sensex continued to finish in a negative terrain for the third week in a row by slipping further by 280 points to 17,728.61, due to persistent selling by operators and investors in view of sustained capital outflows by foreign funds.

Telecom counters suffered on widening of its probe by the Central Bureau of Investigation (CBI) in 2G spectrum scam and confusion over telecom regulator TRAI’s new recommendations on 2G spectrum pricing.

The arrest of DB Realty’s founder in connection with the probe into telecom spectrum allocation was also another factor behind the fall in share values.

Consumer durable, metal, realty, power and capital goods were the pacesetters in the decline.

Expectations of slow down in corporate earnings in the coming quarters due to recent interest rate hike and on expectations of further increase due to rising inflation and also trade imbalances mainly unnerved investors.

Unrest in Egypt, which will have a negative impact on the domestic oil prices as India is a major importer of oil, was also a cause of concern.

The BSE benchmark sensex resumed higher at 18,135.02 and hovered in a range of 18,180.94 and 17,295.62 before ending the week at 17,728.61, disclosing a loss of 279.54 points or 1.55 per cent from its last week-end level. It has dropped by 1,278.92 points or 6.73 per cent in the last three weeks.

The NSE 50-share Nifty also fell by 85.75 points or 1.59 per cent to end at 5,310 from the previous week’s level. It disclosed a loss of 386.50 points or 6.78 per cent in the last three weeks.

Increased selling by foreign funds remained the main concern for the market traders. They sold shares worth about Rs 6,960.10 crore in the current calendar year so far as the per the data issued by the Securities and Exchange Board of India (SEBI).

Market sentiment was so fragile that a sharp fall in food inflation could not able to boost investors’ confidence. Food inflation dipped to a seven-week low of 13.07 per cent for the week ended January 29 from 17.05 per cent in the last week.

The country’s largest private sector power utility firm and ADAG group company, Reliance Infra, was the worst sufferer from the Sensex pack with a fall of 9.19 per cent. The second biggest cellular services provider of the same group, Reliance Communications fell by 15.34 per cent.

Other losers were Hindalco (10.85%), BHEL (6.9%), Tata Steel (6.42%), TCS (5.11%), Sterlite (4.66%) Hero Honda (4.07%), Bharti Aritel (3.69%), Cipla (3.67%) and Wipro (3.21%). However, Bajaj Auto was up by 2.35%, HDFC Bank 2.05%, ITC 1.54%, Tata Power 1.15% and ICICI Bank 0.51%.

Total turnover on the BSE and NSE was Rs 16,734.94 crore and Rs 67,273.18 crore, respectively against the last week-end level of Rs 17,842.71 crore and Rs 66,685.07 crore.

Published on November 10, 2017

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