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The BSE benchmark Sensex plunged 525 points to a five-week low of 18,197.20 during the week under review on heavy selling pressure on fears of negative impact on corporate growth due to interest rate hike by the RBI amid maintaining hawkish stance on further monetary actions.
Global turmoil due to US debt tensions and a weaker-than-expected US economic data too affected the market mood.
Traders as well as investors kept themselves away from making major purchases due to postponement of a vote in the House of Representatives on a US debt plan.
The Reserve Bank of India in its first quarter review of the monetary policy 2011-12, on July 26, hiked the short-term lending (repo) and borrowing rates (reverse repo) by 50 basis points to tame high inflation, making all personal and corporate loans more expensive.
The apex bank has also revised its fiscal-end inflation projection to 7 per cent from 6 per cent earlier.
Interest rate sensitive stocks from realty, banking and auto segments bore the brunt of heavy selling.
Offloading long positions in view of the expiry of July contract too aggravated the situation.
Metal stocks were also at the receiving end, following a fall in metal prices at the London Metal Exchange (LME).
The BSE benchmark Sensex resumed slightly higher at 18,753.35 and hovered in a range of 18,944.60 and 18,131.86 before ending the week at 18,197.20, showing a loss of 525.10 points, or 2.80 per cent, from its last week-end level.
Investors feared the US debt-ceiling standoff could force a default or downgrade of US debt.
The NSE 50-share Nifty also dropped by 151.95 points or 2.7 per cent to 5,482.00.
Among the major indices, the BSE-Realty dropped sharply by 7.39 per cent, the BSE-Capital Goods 5.22 per cent, the BSE-Metal 5.05 per cent, the BSE-Power 4.44 per cent, the BSE-Oil & Gas 4.24 per cent, the Bankex 3.57 per cent and the BSE-PSU by 3.02 per cent.
The BSE Mid-Cap index fell 130.81 points or 1.86 per cent to 6,915.31. The BSE Small-Cap index also slid 157.91 points or 1.87 per cent to 8,305.58.
From the 30-share Sensex pack, 24 scrips declined while six scrips showed moderate gains.
Major losers from the Sensex pack were Jaiprakash Associates (11.42 per cent), BHEL (6.82 per cent), Reliance Infra (6.68 per cent), Jindal Steel (6.53 per cent), SBI (6.10 per cent), L&T (5.45 per cent), Reliance Industries (5.24 per cent), Sterlite Industries (5.12 per cent), Tata Motors (4.96 per cent), Cipla (4.81 per cent), Hindalco Ind (4.75 per cent) and DLF (4.03 per cent).
However, Reliance Communications shot up by 8.55 per cent, Bharti Airtel 6.34 per cent, Maruti 3.94 per cent and Bajaj Auto 1.19 per cent.
The total turnover on the BSE and NSE was Rs 14,429.50 crore and Rs 62,897.84 crore, against the last week’s level of Rs 14,577.75 crore and Rs 51,137.84 crore, respectively.
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