In the week to December 16, benchmark share indices ended at their two-year lows weighed by dismal October IIP data, weakening rupee, high headline inflation and growth concerns.
In the week ended December 16, the Sensex ended at 15491 down 722 points or 4.4% and the Nifty ended at 4,652 down 215 points or 4.4%.
Key share indices extended losses for the third straight day Monday on the back of disappointing Index of Industrial Production data for October. India’s October IIP contracted by 5.1% from a year earlier after a revised 2% in September, the Central Statistical Office said. The de-growth in industrial production is the most since March 2009 when it contracted 5.2%. The IIP data for October 2010 was 11.4 per cent. Manufacturing output, which constitutes about 76 per cent of the industrial production, fell by an annual 6 per cent, the Statistical Office said. The Sensex and the Nifty both ended down 2.1% each.
Stocks snapped a three-day losing streak, amid a volatile trading session Tuesday, on account of short-covering in index heavyweights Reliance Industries and Infosys. The Sensex ended above 16,000 at 16,003, up 132 points and the 50-share Nifty ended above 4,800 at 4,801, up 36 points. The Sensex and the Nifty had both lost over 6% in the last three trading sessions.
Benchmark share indices ended lower, amid a volatile trading session Wednesday, as higher-than-expected November inflation stoked fears of rate hike by the central bank. Weakness in European shares also hurt sentiment. The Sensex and the Nifty both ended down 0.8% each.
The WPI inflation for the month of November came in at 9.11 per cent compared to 9.73 per cent in October. The market was looking at an inflation of below 9 per cent for November. Inflation for November 2010 stood at 8.2%.
Stocks recouped most of the day’s losses to end marginally lower Thursday, led by Reliance Industries, after food inflation for the week ended December 3 eased to a 4-year low of 4.35%. India's food inflation eased to 4.35% in the year to December 3 -- its lowest reading since late February 2008 -- from an annual 6.60% rise in the previous week, government data showed today. Further, On Thursday, the Indian rupee touched a record low of 54.30 to the US dollar on the back of sustained foreign fund capital outflows in view of the fall in the equity markets, coupled with a stronger dollar in global markets.
Friday, key share indices ended near their 2-year lows amid a volatile trading session after the Reserve Bank of India, in its monetary policy review, highlighted growth concerns.
"While inflation remains on its projected trajectory, downside risks to growth have clearly increased. Further rates hike may not be warranted," the Reserve Bank of India (RBI) said in it its mid-quarter review of monetary policy. The 30-share Sensex ended at 15,491, down 345 points and the 50-share Nifty ended down 95 points, at 4,652, its newest low in 2011. On November 3, 2009 the Sensex had ended at 15,404.94 and the Nifty had ended at 4,563.90.
The weakness was led by capital goods shares on the back of slowdown in order inflows and increasing competition from overseas. The BSE Capital Goods Index was the top loser during the week under review down 10.3%. Engineering major L&T was the top Sensex loser down 12.3% while BHEL ended 9% down.
The BSE Bankex lost 7.2% during the week. SBI was the top loser down 9.8% followed by ICICI Bank at 7.6% and HDFC Bank ended 6.5% lower.
Metal shares were also beaten down during the week and the BSE Metal Index lost 7.1% with Tata Steel losing 8.4% and Sterlite Industries ended 11.8% down.
Among the index heavyweights Reliance Industries lost 4.3% while Infosys closed 0.4% higher.
The broader market also showed signs of extreme weakness with the BSE Mid-cap and Small-cap indices both losing over 6% each.
In the mid-cap segment, Sintex Industries was the top loser down 32.2% along with Areva T&D which lost 28.6%. Wockhardt, VIP Industries, Essar Ports, Pantaloon Retail and Jain Irrigation lost over 15% each.