Weekly review: Market continues to reel under sell-off, BSE Sensex slips 182 pts

Nov 23 2013, 16:23 IST
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BSE Sensex dropped 182 points to end at 20,217, extending losses for the third straight week. BSE Sensex dropped 182 points to end at 20,217, extending losses for the third straight week.
SummarySelling in consumer durable, auto, pharma, FMCG and banking stocks kept the market under pressure.

The BSE benchmark Sensex started the week with a bang, spurting over 450 points, but soon lost momentum due to intense sell-off and dropped 182 points to end at 20,217, extending losses for the third straight week.

Selling in consumer durable, auto, pharma, FMCG and banking stocks kept the market under pressure while global developments weighed heavily on investor mind.

The Bombay Stock Exchange 30-share barometer resumed trading on a firm note and touched a high of 20,934.40 on the back of China's proposed economic reforms and hopes that the US stimulus programme would be extended.

Initially, the market got a boost after incoming US Federal Reserve chief Janet Yellen indicated the USD 85 billion monthly bond purchases would continue, raising hopes of higher capital inflows in India and other emerging markets.

The rupee, which strengthened against the dollar, also supported local equities, a broker said.

However, the Sensex fell to a low of 20,137.67 before concluding the week at 20,217.39, posting a fall of 182.03 points, or 0.89 per cent, over the last weekend close.

The key BSE index has tanked by 979.42 points, or 4.62 per cent, in the last three weeks.

The 50-share CNX Nifty of National Stock Exchange (NSE) also tumbled by 60.70 points, or 1 per cent, to end the week below 6,000 mark at 5,995.45.

The market lost the positive momentum after mid-week when minutes from the Federal Reserve's last meeting signalled that the easy money policy may be rolled back in coming months as the world's largest economy shows signs of recovery.

The US central bank's bond-buying plan has been a source of liquidity for most Asian and emerging markets, including India, this year, and played an important role in fuelling periodic rallies on domestic bourses, which have witnessed new peaks in recent months.

"The Fed is looking to taper down its USD 85 billion monthly bond-buying as latest economic data suggests that employment situation in the US is improving," said Raghu Kumar, co-founder of RKSV, a broking company.

"If the (US) economy continues to improve as per expectations, we can expect the Fed to slowly begin tapering its quantitative easing."

Jignesh Chaudhary, Head of Research, Veracity Broking Services, said, "Equity markets shed the initial euphoria (when Sensex soared 453 pts on Monday - its biggest single day gain in a month) and traded a bit flat before receding into the bearish territory in the latter half of the week.

"FIIs lost their buying interest

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