Despite the BSE Sensex recovering sharply on the last trading day yesterday, the benchmark index still closed down by over 221 points at 16,232.54, during the week on continued worries over euro zone debt crisis amid downgrading of the country’s largest bank, SBI, by international rating agency Moody’s.

The BSE and NSE were closed on October 6 for “Dussehra’’.

Sustained capital outflows, fears of global recession and weak second quarter earnings from key companies, to be announced from next week, also weighed down the market.

Banking sector, which was under pressure on high interest rates due to rising inflation, got a severe beating after Moody’s Investor Service on Tuesday downgraded SBI’s standalone rating to D+ from C—.

Debt-laden Greece said last Sunday that it would miss the deficit target set for it for this year and next by the International Monetary Fund (IMF) and the European Union (EU), raising doubts over the success of a second bailout plan that sent global stocks reeling under heavy selling pressure.

As a result, the Bombay Stock Exchange 30-share Sensex commenced the week on a sluggish note and dropped further to a 20-month low of 15,745.43, a level not seen since February 8, 2010, when it had logged a low of 15,651.99.

The market remained bearish on the first three days of the week, but bounced back on Friday by over 440 points after European banks moved to pump money into ailing economies, giving investors hope that the risks of a financial crisis were waning.

The Sensex later ended the week at 16,232.54, posting a net loss of 221.22 points, or 1.34 per cent, from its last week-end level.

The NSE broad-based 50-issue Nifty also fell 55.20 points or 1.12 per cent to end the week at 4,888.05.

Foreign Institutional Investors (FIIs) sold shares worth nearly Rs 2,226 crore during the week, including provisional data of Friday, which also dampened the sentiment.

Food inflation rose to 9.41 per cent for the week ended September 24 from 9.13 per cent in the previous week. The Finance Minister, Mr Pranab Mukherjee, expressed concern over the rise in food inflation, and said that he has been in constant touch with the RBI on how to rein in the rate of price rise.

State-run banking major, SBI, was the top loser from the Sensex pack, falling 8.33 per cent, while private telecom giant Bharti Airtel tumbled by 6.16 per cent.

Other major losers were ICICI Bank (5.83 per cent), HDFC Bank (3.73 per cent), Jindal Steel (4.59 per cent), Hindalco (4.07 per cent), HUL (3.25 per cent), Bajaj Auto (1.99 per cent), Wipro (2.03 per cent), Infosys (1.05 per cent) and BHEL (1.35 per cent).

However, L&T rose 2.6 per cent, Maruti Suzuki (2.93 per cent), Tata Motors (1.73 per cent), Tata Steel (1.05 per cent), Coal India (1.35 per cent), Sun Pharma (1.68 per cent) and TCS (1.08 per cent).

Among the BSE sectoral indices, Bankex plunged 4.63 per cent, Teck (1.74 per cent), Realty (1.53 per cent), PSU (1.34 per cent) and Power (1.15 pc). However, Capital Goods rose 0.74 per cent.

Second-line counters, too, suffered heavy setback as retail investors preferred to book profits under current uncertainty in global markets. As a result, BSE-Midcap and BSE-Smallcap indices underperformed the Sensex, and slumped 2.78 per cent and 2.32 per cent, respectively.

The total turnover on the BSE and NSE declined to Rs 9,209.92 crore and 41,158.53 crore, respectively, from the last week-end level of Rs 12,587.48 crore and Rs 55,180.54 crore.

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