Wkly Review: Markets stay in red for 3rd week

The stock markets remained in red for third straight week as the Reserve Bank of India (RBI) disappointed investors who seemed confused by continued high level of volatility in the past couple of weeks.

Technical charts, however, indicate continued choppiness for another week with the Sensex closing below the 18,270 resistance and in the absence of any major trigger as well as the delay in fund allocations for near year by foreign funds.

Fears of US recession amid US sub-prime mortgage crisis still causing trouble also shadowed the bourses.

The market bounced by 585 points on Friday, mitigating the weekly losses on heavy purchases by Foreign Institutional Investors (FIIs) in futures and options.

The week also saw another interest rate cut by the US Federal Reserve in a bid to stimulate the flagging US economy.

US Fed had slashed key rates by 75 basis points on January 22 followed by a 50 basis point cut on January 30.

The move, however, did not have any impact on the market in the light of the RBI's decision to keep all key rates steady in its quarterly review of monetary policy announced on January 29.

In the week ended February 2, the Bombay Stock Exchange bellwether Sensex moved widely between 18,491.06 and 17,417.63 before ending the week at 18,242.58, a fall of 119.08 points or 0.65 per cent over the last weekend's close of 18,361.66.

Similarly, the broad-based S&P CNX Nifty of the National Stock Exchange (NSE) closed the week 66.10 points or 1.23 per cent lower at 5,317.25 from last weekend's close of 5,383.35.

FIIs pulled out Rs 5,930 crore from equity, while pumping in Rs 4,333 crore in the futures & options in the week even as the market eagerly awaited resumption of their buying after the Fed slashed rates twice in eight days.