Bourses end in red for seventh week

Written by Markets Bureau | Mumbai, Jul 4 | Updated: Jul 6 2008, 05:18am hrs
Sustained rise in the rate of inflation and firming up of crude oil prices continued to take its toll on the bourses with benchmark indices posting negative weekly closing for the seventh week in a row on Friday. The recent political uncertainty over the Indo-US nuclear deal also added to the volatility of the markets.

The 30-share Bombay Stock Exchange (BSE) Sensex ended the week with a loss of 348.22 points or 2.52%. During the same period, the broader S&P CNX Nifty of the National Stock Exchange (NSE) shed 120.65 points or 2.91%.

Though trading remained choppy for the week, the countrys bourses made a decent comeback on Friday in spite of marginal rise in the rate of inflation on Friday. Indias annual rate of inflation rose to 11.63% for the week ended June 21 as against previous weeks level of 11.43%. Still, the Sensex registered a gain of 359.89 points or 2.75% before closing the day at 13,454 points. The Nifty also ended the day with a gain of 90.25 points or 2.30% before closing at 4,016 points.

Market analysts attributed Fridays comeback to the short-covering in the wake of a slowdown in selling by foreign institutional investors (FIIs) and certain clarity emerging on the political front over the nuclear deal.

Optimism was witnessed in the market on the back of performance of the sectoral indices. Barring the metals index, all the BSE sectoral indices ended the day in positive terrain.

Shashi Krishnan, CIO, Bajaj Allianz, said, With Fridays inflation figure being released, there is an indication that the growth in the rate of inflation is slowing down and it will take some more time for the reversal in the trend. However, Friday gains were on the back of short covering but markets are expected to stay choppy till the time inflation and crude prices stabilises.

Krishnan, however, maintained that in spite the recent turmoil in the market, Indias growth story is intact.

Alex Mathew, head of research, Geojit Financial Services, said, Capital goods sector stocks were in good demand due to expectation of signing of the nuclear deal. Inflation figures were below expectation of 12% which gave some interest in banking, financial and realty sector stock. These were hunted by bears for the last few weeks.

The provisions data indicates that FIIs were net buyers at Rs 372.35 crore on Friday, while domestic institutional investors were marginally net sellers at Rs 97.02 crore. On the back of across-the-board buying, the market breadth on BSE was widely positive. Among the 2,677 stocks traded on the exchange, 1,696 advanced, 898 declined and 83 remained unchanged. While in the Sensex pack, 26 stocks advanced and four ended in the red.