Indices lose ground ahead of Fed meet

The Indian benchmark indices ended on a negative note on Friday, extending its losing streak to the fifth week. Market players said investors remained wary of taking fresh positions ahead of a crucial speech by US Federal Reserve Chairman Ben Bernanke. Analysts globally were awaiting clarity from the Fed on a fresh stimulus package for the ailing US economy.

The 30-share Sensex of the Bombay Stock Exchange (BSE) lost 297.50 points, or 1.84 per cent, to close at 15,849 — the lowest in nearly 19 months. The index is down nearly 23 per cent this year and is among the world’s worst-performing equity markets. The broader S&P CNX Nifty of the National Stock Exchange (NSE) was down 92 points, or 1.90 per cent, to 4,747.80.

Bernanke is due to address a gathering of central bankers from around the world at Jackson Hole, Wyoming. Incidentally, a year ago, in the same place, he had announced the second round of quantitative easing. However, going by the views of some of the leading global economists and analysts, there’s dim hope for a third round of stimulus package.

Back in India, stocks belonging to the Anil Ambani Group saw increased selling pressure after the NSE announced that Reliance Capital will no longer be part of the benchmark Nifty from October 10. Reliance Capital lost more than 12 per cent, while Reliance Infrastructure was down 6.53 per cent. Even Reliance Power and Reliance MediaWorks lost 5.18 per cent and 2.12 per cent, respectively.

The market breadth was extremely negative with more than 2,200 stocks losing ground, against 637 gainers. Provisional figures, meanwhile, showed that foreign institutional investors sold shares worth Rs 226 crore, even as domestic investors were net buyers at Rs 393 crore. Reliance Industries, which has the highest weightage in Sensex, fell sharply during the late session to close 4.5 per cent lower to Rs 719.40 — lowest since late March 2009.

Elsewhere in Asia, Hang Seng lost 170 points or 0.86 per cent. The European markets also traded weak ahead of the Fed meet. The FTSE 100 was down nearly 1.50 per cent.