Mkts turn bearish, key indices tumble by 5 pc

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Mumbai, May 10:: The stock markets tumbled by nearly 5.0 per cent in the week as inflation showed no signs of coming down with soaring oil prices adding to worries about widening trade deficit.

Despite several fiscal and monetary measures taken by the government and the Reserve Bank of India in the past few weeks, inflation moved up modestly to a 42-week high of 7.61 per cent for the week ended April 26.

Global crude oil for June delivery hit a new record high at 125 dollars a barrel, adversely affecting global stock markets throughout the week.

In the week to May 10, the Bombay Stock Exchange benchmark Sensex continuously moved downwards to end the week below 17K at 16,737.07, a net fall of 863.05 or 4.9 per cent from its last weekend's close of 17,600.12.

The broader 50-share S&P CNX Nifty of the National Stock Exchange also dipped by 245.60 points or 4.7 per cent to end the week below 5,000 mark at 4,982.60 from its previous weekend's close of 5,228.20.

According to analysts, spiralling inflation was the main cause of concern for the market besides negative global factors such as high global oil prices which might lead to widening of trade deficit and a slowdown in capital inflows.

There were virtually no trigger for the market after completion of earnings season last month, they added.

Foreign Institutional Investors (FIIs) too remained negative on Indian equity markets. They pulled out nearly Rs 10,500 crore so far in the calendar year.

Meanwhile, Finance Minister P Chidambaram assured of more administrative steps to check price rise and said the marginal upside variation in inflation means it is stable and not statistically significant.

Global markets are still under pressure with American stocks losing further ground on Friday after reminders of the lingering credit crunch from American International group and of inflation threats from crude oil.

The markets are led by global developments but will look for a relief as the government release industrial production data on May 12.

In the week under review, Realty stocks were hit hard with the BSE realty index losing 9.49 per cent.

Capital Goods, Bank, Power and Oil & Gas stocks were other major losers during the week. Their indices fell by 7.0 to 8.0 per cent.

The broad-based BSE-100 Index dropped sharply by 483.59 points or 5.17 per cent to close the week at 8,865.05 from its previous weekend's close of 9,348.64.

The BSE-200 Index and the Dollex 200 were quoted down at 2,081.88 and 832.50 at the weekend compared to their last weekend's close of 2,191.69 and 895.84 respectively.

The BSE-500 Index also finished the week sharply lower at 6,653.45, a loss of 336.68 points or 4.82 per cent from its last weekend's close and the Dollex-30 ended down at 3,300.38 from 3,547.50 at the last weekend.