Profit booking at higher levels coupled with weak global cues led key equity indices to extend losses on Friday for the second day in row. The fall in the last two sessions has taken away most gains posted in the early part of the week. Reflecting the losses by the Dow Jones Industrial average (DJIA) on Thursday, which fell by around 2.43%, key Indian indices, after opening on a weak note, lost further ground, as European markets too opened in the negative. The serial blasts in Bangalore also dampened sentiment, dealers said.
The 30-share Bombay Stock Exchange (BSE) Sensex lost 502.07 points or 3.40% before closing at 14,274.94 points while the Nifty of the National Stock Exchange (NSE) pared 121.70 points or 2.74% before ending the day at 4,311.85 points.
Jignesh Desai, head, institutional sales, SBICAP Securities, said, ?Weak cues from global markets along with not so impressive results by Reliance Industries Ltd (RIL) dented investor sentiments after a good rally in the past few sessions. In the short-term, market volatility is expected to continue and a clear picture will emerge once inflations slips to a manageable level.?
However, the broader markets managed to outperform the benchmark with the BSE Mid Cap index losing a marginal 8.31 points or 0.15% to close the day at 5,572.59 points while the BSE Small Cap index ended the day losing 17.33 points or 0.25% to close the day at 6,778.78 points.
Amongst the sectoral indices, BSE Bankex was the worst hit as investors started to dump banking sector stocks on expectations of further monetary tightening by the Reserve Bank of India (RBI) in its policy review meeting on July 29. The BSE Bankex lost 411.62 points or 5.75% to end the day at 6,751.86 points. Baring BSE FMCG and healthcare, all other sectoral indices ended the day in the red.
Both the foreign institutional investors and the domestic institutional investors were net sellers on Friday and according to the provisional data from the stock exchanges, the figures stood at negative Rs 565.73 crore and Rs 302.41 crore respectively.
Buoyed by the political development on the local turf, Indian markets had witnessed a rally in the past one week. Also, the overall participation by investors had also seen a upward trend. However, the combined trading volumes at both the stock exchanges on Friday slipped to 97.60 crore shares as against 118.99 crore shares on the previous trading session. The combined turnover of BSE and NSE cash segments stood at Rs 20,608.95 crore as against a turnover of Rs 25,115.17 crore on Thursday.
The Sensex, in the last week had surged by 639.54 points or 4.6% while the Nifty gained 219.6 points or 5.3%.