Market review: Sensex snaps 3-week gaining spree, down 107 points

Dec 15 2012, 16:17 IST
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In straight three- week of gaining string, the key BSE index had spurted by 1,114.73 points, or 6.09%. (Reuters) In straight three- week of gaining string, the key BSE index had spurted by 1,114.73 points, or 6.09%. (Reuters)
SummaryIn straight three- week of gaining string, the key BSE index had spurted by 1,114.73 points, or 6.09%.

Stocks: The BSE benchmark Sensex snapped its three-week winning streak and fell by 107 points despite fag-end buying on expectation of a rate cut by Reserve Bank due to fall in WPI inflation figure as well as healthy rise in industrial output.

The Sensex rose to a 20-month high as India's factory output, measured by the Index of Industrial Production (IIP), soared to a 16-month high of 8.2 per cent in October.

However, it surrendered the gains on profit booking amid drop in exports for the seventh straight month in November.

Retail inflation rose to 9.90 per cent in November from 9.75 per cent in October, while WPI inflation declined to 7.24 per cent in November from 7.45 per cent in October.

"WPI inflation now looks on track to fall below 7 per cent by March, opening up space for RBI to trim policy rates, which look set to be reduced in January," said BNP Paribas Chief Asia Economist Richard Iley.

Investors were also enthused at the tail-end of the week by Finance Minister P Chidambaram's comment that government will take some more steps in the next few weeks to revive the economy and boost investment sentiments.

The 30-share Sensex resumed better and shot up further to a 20-month high of 19,612.18, but declined afterwards to a low of 19,193.11 before ending the week at 19,317.25, posting a loss of 106.85 points, or 0.55 per cent.

In straight three- week of gaining string, the key BSE index had spurted by 1,114.73 points, or 6.09 per cent. The NSE 50-share Nifty also declined by 27.80 points, or 0.47 per cent, to finish the week at 5,879.60.

Banking stocks saw some activity on hopes legislation on sectoral reforms would be passed during the current session of Parliament, said traders.

Foreign Institutional Investors (FIIs) continued their buying spree by investing net Rs 7,107.28 crores during the week, including provisional figure of December 14. Kishor P Ostwal, CMD, CNI Research said, "Nifty futures after testing 6000 in this week corrected as there were huge over leveraged long positions. Also there was some shift of liquidity from secondary market to large FPO/IPO making investors to take some profits and create new liquidity till the time refunds are granted".

"The global economy is going through a difficult phase as businesses, consumers and investors wait for clarity on a range of risks, from

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