Sensex, Nifty post biggest weekly fall since mid-March

The BSE Sensex fell nearly one per cent on Friday, marking its eighth consecutive session of falls as Power Grid Corp fell after saying it would sell new shares to raise funds, while banks and consumer good companies extended recent falls.

The benchmark BSE index lost three per cent and the Nifty lost 3.5 per cent this week, their worst performance since the week ended on March 22, on uncertainty about how long the Reserve Bank of India would continue its measures to defend the rupee. The BSE Sensex ended down 0.79 per cent at 19,164.02, while the Nifty lost 0.87 per cent to close at 5,677.90.

Both indexes have lost about six per cent each in the last eight trading sessions. Power Grid Corp of India slumped 11.18 per cent after saying it would issue 694.5 million new shares in a secondary share offering, worth Rs 7,143 crore as of Thursday's close.

State-run banks continued recent falls on asset quality concerns, while Bank of America-Merrill Lynch downgraded public sector lenders Bank of Baroda and Union Bank of India on worries about market-to-market losses on their bond portfolios on the back of the central bank's rupee measures.

Private banks reliant on short-term funds have also been pummelled following the RBI's actions last month. YES Bank slumped 5.78 per cent on Friday, bringing its loss for the week to 15.91 per cent, its worst performance since March 2009. YES Bank has fallen 38.3 per cent since the RBI first unveiled its cash draining measures on July 15.

Financial Technologies slumped 23.04 per cent, dropping for a second consecutive session, while its unit Multi Commodity Exchange of India dropped 20 per cent.

Financial Technologies shares have now lost 72.6 per cent in value in the last two trading sessions after commodity bourse unit National Spot Exchange Ltd suspended trade in most of its forward contracts and deferred payments on client trades.

Meanwhile, consumer goods shares retreated further from record highs hit last month, Hindustan Unilever falling 3.03 per cent and ITC down 1.9 per cent.

Shares in retailers, however, gained after the government relaxed foreign investment rules in the sector, raising hopes it would spur overseas interest in domestic chains.

Future Retail closed 6.17 per cent higher, while Trent ended up 0.56 per cent.

Jewellery maker Titan Industries rose 8.91 per cent after Deutsche Bank upgraded the stock to "buy", saying RBI's recent clamp-down on gold imports will have little negative impact on organised retailers such as Titan.