Wkly Review: Sensex drops 769pts

Sky-high inflation and fears of cascading impact of the oil prices, which hit at an all-time high, created panic among investors on Friday.

The 30-share index of the Bombay Stock Exchange ended the week at 13-month low of 13,802.22, a loss of 769.07 points or 5.28 per cent from its last weekend's close.

Similarly, the 50-share S&P CNX Nifty of the National Stock Exchange tumbled by 210.90 points or 4.85 per cent to close the week at 4,136.65 from its previous weekend's close.

The markets, however, had recovered by more than 300 points on June 25 and 26 largely because of short covering by domestic players and Foreign Institutional Investors (FIIs) due to expiry of derivatives series on Thursday.

The market was flooded with negative factors including a fresh surge in global crude oil prices, which hit a historic high of USD 142.26 a barrel in New York on June 27 amid a prediction by the OPEC's president that oil prices could reach USD 170 level owing to weak dollar and geopolitical unrest.

The inflation based on the wholesale price index also shot up to 7.42 per cent for the week ended June 14.

Analysts said, indications from Finance Ministry that the double digit inflation will linger on for some more time even if prices stabilise and Standard & Poor's decision to lower India's growth following rising inflation also had a considerable impact on the market.