Sensex recovers 292 pts in see-saw trading during the week

PTI Mumbai | Updated on October 01, 2011 Published on October 01, 2011

In see-saw trading this week, the BSE benchmark Sensex recovered by almost 292 points to settle at 16,453.76 on hectic short-coverings mainly in IT, refinery and realty counters.

The market was unpredictable throughout the week on lingering fears about the euro zone debt crisis. The 30-share Sensex dipped three out of five trading sessions on alternate bouts of buying and selling.

Besides negative global factors like euro debt problems and slowdown in world economy, domestic developments such as sliding rupee against US dollar and likely weak second quarter performance by some key companies on high input costs, due to stubbornly high inflation, weighed on the market.

The market logged gains on hectic short-coverings on the expiry of September’s derivative contracts on Thursday.

Hopes of a bail-out plan by European policymakers to rescue debt-laden Greece and proposal to abolish or largely reduce the Securities Transaction Tax (STT) by the Centre on Monday to broaden the market involvement, helped the Sensex to gain about 473 points, its third biggest single-day gain this fiscal, on Tuesday.

Meanwhile, the German Parliament on late Thursday approved expanding the powers of the euro zone bailout fund to tackle the debt crisis. But the move failed to enthuse investors who said the first bailout didn’t make the situation for Greece any better.

The Bombay Stock Exchange 30-share barometer continued to veer in and out of positive terrain in a wide range between 16,756.08 and 15,801.01 before concluding at 16,453.76, a net rise of 291.70, or 1.80 per cent. Last week, it had fallen by 771.74 points, or 4.56 per cent.

Similarly, the wide-based NSE 50-issue Nifty moved in a range of 5,034.25 and 4,758.85 before ending the week higher by 75.50 points, or 1.55 per cent, at 4,943.25.

The Sensex has logged a drop of 9.6 per cent in the July-September quarter - its biggest dip in three years. The key index lost 10.4 per cent in the same quarter in 2008.

Buying in the form of short-coverings was so strong that operators ignored rise in food inflation and sustained selling by FIIs.

Interest rate concerns gathered momentum as food inflation rose to 9.13 per cent for the week ended September 17, up from 8.84 per cent in the previous week - a development which Finance Minister Mr Pranab Mukherjee termed as “grave”.

Foreign Institutional Investors (FIIs) sold shares worth Rs 1,355.97 crore in the week, including provisional data of September 29 and 30.

IT counters attracted heavy buying interest on the back of good financial performance from Accenture PLC, the world’s second-largest technology consulting company, as also weakness in the rupee value against dollar.

Metals, consumer durables and capital goods bore the brunt of selling. Metal stocks declined on fall in metal prices on London Metal Exchange (LMEX) due to a slowdown in the world economy.

Besides European markets, which closed with smart gains, others including Asia and US, closed mixed. In Europe, key indices like CAC, DAX and FTSE ended the week up between 1.22 per cent and 6.12 per cent. In Asia, Japan, South Korea and Taiwan markets ended in the green while China, Hong Kong and Singapore indices closed in the red.

Dow Jones Industrial Average settled the week up 1.32 per cent, while the Nasdaq Composite Index was down 2.73 per cent.

Published on October 01, 2011
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