Weekly Report: Markets shed 2% in last week of 2011

India's benchmark share indices ended nearly 2% down in the week to December 30, the last trading week of 2011, weighed down by bank shares on rising worries over asset quality in a slowing economy and selling pressure in Reliance Industries on concerns over lower gas output from KG-D6 field.

For the week ended December 30, the 30-share Sensex ended at 15,455 down 284 points or 1.8%. The S&P CNX Nifty closed at 4,624 dropping 90 points or 1.9%.

For the calendar year 2011 both the benchmark share indices slumped nearly 25% each.The 30-share Sensex ended at 15,455 down 5,054 points or 24.6% while the broader 50-share Nifty ended at 4,624 down 1,510 points or 24.6%.

Markets started the week on a positive ending near their day's high Monday led by software shares, index heavyweight Reliance Industries and telecom major Bharti Airtel. Positive cues from Asian peers also boosted sentiment.

IT shares gained on the back of better-than-expected economic data released in the US on December 23. Software majors earned most of their revenues from software exports to the US.

The Sensex touched a high of 15,998 and finally ended up 232 points at 15,971. Nifty ended up 65 points at 4,779.

The rally fizzled off on Tuesday and key share indices ended lower amid a volatile trading session Tuesday tracking weakness in Asia with index heavyweight Reliance Industries and Tata Motors leading the decline. The Sensex ended down 97 points at 15,873 and the Nifty ended down 29 points at 4,750.

Stocks ended lower for the second straight session on Wednesday, ahead of December futures and options expiry, dragged by bank shares on worries non-performing assets may rise on the back of a slowing economy and Reliance Industries on concerns of lower gas output from KG-D6 gas field.

The Sensex ended down 146 points at 15,728. Nifty ended down 45 points at 4,705.

Markets ended lower for the third straight day on Thursday, weighed down by weak global cues and a depreciating rupee, with index heavyweights Reliance Industries and Infosys leading the fall.

The Sensex which touched an intra-day low of 15,515 finally ended down 184 points at 15,544 while the Nifty which touched an intra-day low of 4,639 closed lower by 59.55 points at 4,646.

Food inflation fell sharply to a six-year low of 0.42% in the week ended December 17 as prices of essential items like vegetables, onion, potato and wheat declined. Food inflation, as measured by Wholesale Price Index (WPI), stood at 1.81% in the previous week.

The losses during the week were led by oil & gas and bank shares. The BSE Oil & Gas Index was the top loser during the week under review down 5%. On Friday, the stock has slipped 3% to Rs 690, its lowest level since March 2009, on concerns that of falling gas output from KG-D6, uncertainties over production sharing contracts and pressure on refining margins.

The BSE Bankex was the second top losers among the sectoral indices down nearly 4%. Bank shares weakened on concerns that non-performing assets would increase because of a slowing economy. Bank of India slumped 9%, Axis Bank 8.2% and ICICI Bank lost 5.2%.

The broader market continued to remain weakn with the BSE Mid-cap down 1% and Small-cap indices losing 1%.

In the mid-cap segment, Tulip Telecom, India Infoline, Central Bank of India and Balrampur Chini lost between 10-15% each.

In the small-cap segment, Alchemist, Bedmutha Industries, Everest Kanto, Galant Ispat and Gss Infotech lost over 20-22% each.