Sensex loses 296 points this week on profit-booking, Euro zone debt crisis

The BSE benchmark Sensex snapped its last three weeks’ winning streak and slipped 296 points at the end of the week due to profit-booking by operators and investors, amid weakness in European markets before the outcome of the bank stress tests.

Turmoil in global markets on fears of the Euro zone debt crisis spreading to major European economies and lower industrial production data pulled down Sensex to 18,326.42.

Impasse over debt ceiling in the US and back-to-back warning by Moody’s and S&P on US debt also weighed on trading sentiment.

Bomb blast in three places in Mumbai during the week also affected market sentiment.

Analysts said first quarter results announced by the country’s second largest software firm Infosys Tech were below market expectations and aided the downtrend.

The company reported a 15.72 per cent jump in consolidated net profit to Rs 1,722 crore for the first quarter ended June 30, 2011.

Indicating sluggishness in the economy, industrial growth fell to 5.6 per cent in May from 8.5 per cent in the same month last year, mainly due to the poor performance of the manufacturing and mining sectors, further aggravated the situation.

The BSE benchmark Sensex resumed lower at 18,823.19 and dropped further to 18,326.42 before settling the week at 18,561.92, a net loss of 296.12 points or 1.57 per cent from its last weekend’s level. It had gained 987.51 points or 5.53 per cent in the last three weeks.

Stocks from realty and banking segments, too, attracted selling on fears the rising interest rates in view of rise in inflation which might affect the bottomline of these companies/banks.

Metal and mining stocks slid further on reports that ministerial panel approved the draft Mining Bill, which proposed profit-sharing with people affected by their projects.

The NSE 50-share Nifty also dropped 79.55 points or 1.41 per cent to 5,581.10 from its last weekend’s level.

Among the indices, the BSE-IT fell 5.53 per cent, the BSE-Teck 4.51 per cent, the BSE-Metal 2.36 per cent, the BSE-Realty 1.89 per cent, the BSE-Capital Goods 1.35 per cent and the BSE-Auto 1.19 per cent.

However, the BSE-IPO shot up 1.70 per cent, the BSE-HC 1.26 per cent and the BSE-Oil & Gas 1.12 per cent.

Major losers from the Sensex pack were Infosys (8.31 per cent), Hindalco (6.26 per cent), Jaiprakash Associates (3.95 per cent), Hero Honda (3.76 per cent), Wipro (3.63 per cent), Tata Steel (3.56 per cent), BHEL (3.02 per cent), Cipla (2.56 per cent), Reliance Infra (2.21 per cent), Bajaj Auto (2.62 per cent) and HDFC (2.60 per cent).

However, Reliance Industries shot up 2.21 per cent, followed by ONGC 0.71 per cent, ITC 0.52 per cent and M&M 0.28 per cent.

The total turnover at BSE and NSE fell to Rs 12,562.73 crore and Rs 49,941.40 crore, respectively from Rs 15,233.28 crore and Rs 54,892.40 crore previously.

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