Sluggish start to 2014, BSE Sensex slumps to 2-week low

Written by PTI | Mumbai | Updated: Jan 4 2014, 22:42pm hrs
StockSensex is expected to remain cautious over political developments leading up to general elections. Reuters

Sluggish start to 2014; Sensex slumps to 2-week low

Mumbai, Jan 4 (PTI)

After an eventful 2013, the new year started on a tepid note for the domestic stock market, which is expected to remain cautious over political developments

leading up to the general elections.

The benchmark S&P BSE Sensex snapped its two-week gains, tumbling 342 points in the just concluded trading week on fresh selling in capital goods, power, PSU, auto, refinery, metal and banking sectors.

RBI Governor Raghuram Rajan, in his foreword to the 8th edition of the RBI's Financial Stability Report 2013, said any political instability will lead to a further erosion of investor confidence in the economy and that a stable new government would be desirable at the Centre.

However, the RBI said India is ready for the US Federal Reserve's tapering and pegged current account deficit at less than 3 per cent of GDP in the current financial year. The Sensex resumed higher at 21,260.15 and hovered in a wide range of 21,331.32 to 20,731.33 before concluding at more than two-week low of 20,851.33, disclosing a loss of 342.25 points, or 1.61 per cent, over the last weekend.

The 30-share index had gained 478 points, or 2.31 per cent, in the previous two weeks. The NSE 50-share Nifty also dropped by 102.65 points, or 1.63 per cent, to 6,211.15. It had gained by 145.40 points, or 2.36 per cent, in the previous two weeks.

The markets appeared unimpressed even after Prime Minister Manmohan Singh said his government would continue to push economic reforms, create a favourable environment for foreign direct investment and work harder to generate more employment opportunities in the manufacturing sector.

However, foreign institutional investors continued their buying spree by investing net Rs 1,119.44 crore as per Sebi data including the provisional figure of January 3.

Jignesh Chaudhary, Head of Research, Veracity Broking Services said, "There was nothing to cheer about from the Indian equity markets this week as markets traded weak throughout the week due to thin holiday trading and some profit booking in blue-chip funds." FII's abstained from rigorous participation in the market

due to the holiday season as their global offices were closed for the New year, he said."Moreover positive data coming out the US markets have hinted at a better-than-expected recovery, which will throw new challenges to Indian equity markets; although it is good for export-oriented sectors, which will see better performance

with renewed exports.

"But it will also prompt Fed to speed up its tapering process which will eventually put adverse pressure in Indian equity markets in an uncertain political environment with high inflation and low growth," he added.

Twenty-four scrips out of the Sensex pack ended in red while only six finished in green. Major losers were * Mahindra & Mahindra (7.03 pct), * Tata Power Company/b> (6.54 pct) pct, Larsen & Toubro Ltd (6.40 pct), * Oil & Natural Gas Corpn (5.95 pct), Bharat Heavy Electricals Ltd (BHEL) (4.30 pct), ICICI Bank (3.56 pct), * Cipla (3.39 pct), State Bank of India (3.17 pct), NTPC (3.94 pct), Hindalco Industries (2.82 pct), Tata Steel (2.54 pct), Axis Bank

(2.37 pct), ITC Ltd (2.21 pct), Tata Motors (2.11 pct), Bajaj Auto (1.95 pct), * Coal India (1.93 pct), Reliance Industries (1.54 pct) and Sesa Sterlite Ltd (1.44 pct) while * Tata Consultancy Services rose by 2.70 pct andMaruti Suzuki India (1.48 pct).

Among the S&P BSE sectoral indices, CG fell by 4.65 pct followed by Power 3.32 pct, PSU 2.79 pct, Oil & Gas 2.68 pct, Bankex 2.28 pct, Auto 2.26 pct and Metal 2.01 pct. However, IT moved up by 0.93 pct and Teck by 0.86 pct.The total turnover at BSE and NSE rose to Rs 10,486.82 crore and Rs 46,164.73 crore, respectively, during the week as against the last weekend's level of Rs 7,868.99 crore and Rs

41,974.45 crore.