The BSE Sensex ended in the red for the second consecutive week, slipping 4.45 per cent during the week, due to all-round selling pressure triggered by negative industrial growth in October.

The rate pause by the Reserve Bank of India (RBI) in its mid-quarter policy review failed to enthuse the market, which also was expecting a cut in CRR to infuse liquidity in the system.

Industrial output as measured by IIP registered a negative growth of 5.1 per cent in October — lowest in over two years — due to rising interest rates, high prices and global uncertainties. Factory output had grown 11.3 per cent in October last year.

The BSE Sensex fell 722.11 points or 4.45 per cent to a more than two-year closing low of 15,491.35 against the previous week-end level of 16,213.46. It has lost 1,355.48 points or 8.05 per cent in the last two weeks.

The 50-share S&P CNX Nifty fell 215.10 points or 4.42 per cent to finish at 4,651.60. The BSE Mid-Cap index fell 6.11 per cent while the BSE Small-Cap index fell 6.03 per cent.

The central bank left its main lending rate unchanged to support faltering economic growth as inflation shows signs of cooling. It also refrained from cutting the cash reserve ratio (CRR) from 6 per cent, despite tight liquidity in the system.

Persistent selling pressure from foreign funds also affected the market sentiment.

Reliance Industries (RIL) fell 4.30 per cent to Rs 723. L&T slumped 12.32 per cent to Rs 1,075.80. Shares in capital goods sector slumped after the recent data showed that capital goods production shrank 25.5 per cent in October 2011 from a year earlier.

HDFC Bank declined by 6.49 per cent to Rs 415.95 and ICICI Bank fell 7.59 per cent to Rs 676.05. The stock hit a 52-week low of Rs 667 on Friday. SBI fell 9.84 per cent to Rs 1,680.45.

Other losers from the Sensex pack were Sterlite (11.83 per cent), DLF (8.97 per cent), Tata Steel (8.36 per cent), Tata Power (7.35 per cent), Jaiprakash Associates (6.79 per cent), M&M (6.32 per cent) and Bharti Airtel (6.24 per cent). However, HUL was up 1.7 per cent and Cipla 1.81 per cent.

Among the major indices, the BSE-Capital Goods dropped by 10.3 per cent, Consumer Durables 8.38 per cent, Realty 8.22 per cent, Bankex 7.25 per cent and Metals by 7.08 per cent.

Total turnover on the BSE and NSE rose to Rs 10,050.38 crore and Rs 50,279.35 crore, respectively against the previous week-end level of Rs 8,808.57 crore and Rs 38,674.95 crore.

Forex: The Indian rupee tumbled to a historic low of 54.32 against the American currency during the past week on persistent dollar demand from banks and importers though it rebounded sharply to end at 52.70/71 after the intervention of the Reserve Bank of India (RBI) to ease volatility in the forex market.

The rupee resumed lower at 52.09/10 per dollar at the Interbank Foreign Exchange (Forex) market against the last week-end level of 52.03/04 per dollar and dropped further to an all-time low of 54.32 per dollar.

However, it recovered sharply due to fresh selling of dollars after the Reserve Bank of India imposed restrictions on forward trading and banks’ exposure to the forex market to check the slide of the domestic currency.

It moved in a wide range of 52.09 per dollar and 54.32 per dollar during the week before ending at 52.70/71 per dollar, still showing a loss of 67 paise or 1.29 per cent from its last week-end level.

Concerned over economic slowdown, the Reserve Bank kept interest rates unchanged and indicated that it could cut key policy rates from now onwards to arrest the falling growth while keeping a close vigil on inflation.

Food inflation fell to a nearly four-year low of 4.35 per cent during the week-ended December 3 against 6.6 per cent previously.

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