Sensex snaps 14-week rally, drops by 716 pts

Last day's gain in share prices following several measures announced by SEBI failed to maintain a 14-week rally as the benchmark Sensex dropped 4.7% as profit-booking emerged at higher levels in view of capital outflow from foreign funds.

Anticipation of a strong push for economic reforms by the newly-elected United Progressive Alliance (UPA) government, positive global cues and strong foreign funds inflows had triggered rally in recent weeks.

World stocks fell on Monday after finance ministers from the Group of Eight leading industrialised countries last Saturday, said they have begun discussing how to unwind the fiscal and monetary policy measures undertaken in response to the financial and economic crisis that spread last year.

Sectors such as Realty, Oil & Gas and Metal were the worst suffers due to heavy selling pressure.

The Bombay Stock Exchange 30-share barometer ended the week under review lower at 14,521.89, by 716.05 points or 4.7% over its last weekend's close.

The National Stock Exchange's 50-share Nifty also dropped sharply to end the week at 4,313.60, showing a loss of 269.80 points or 5.89% from its previous weekend's close.

The market driver Foreign Institutional Investors (FIIs) turned the net sellers of Rs 1,667.60 crore in the last four days of the week as per SEBI's announcement.

Trading for the week began on a weak note with weak global markets and slide in heavyweight Reliance Industries following an unfavourable court ruling on gas sales.

Reliance Industries lost 13.46% to Rs 2,039.60.

India's largest oil exploration firm by sales ONGC fell by 10.36 per cent.

Other major losers were Tata Steel, which dropped 9.66%, Hindalco 12.39%, Sterlite Industries 15.51% and DLF Ltd 10.30%.

However, the market recovered sharply by 256 points on Friday due to several measures announced by SEBI during the week to boost the equity market, besides higher global cues.

The Securities and Exchange Board of India unveiled a series of measures to attract investors and boost confidence in the stock market.

It approved "anchor investor" concept under which an investor can subscribe up to 30 per cent of the quota for institutional investors in an initial public offerings (IPO).

The BSE-Oil and Gas index dropped by 1,122.53 points or 10.68%, the BSE-Realty fell by 372.21 points or by 10.16% and the BSE-Metal by 1,181.46 points or 9.67%.

The trading volume was relatively low during the week with a total turnover on BSE falling to Rs 34,090 crore from Rs 39,216 crore and Rs 1,02,410 crore on the NSE from Rs 1,17,890 crore.