India Business
Indian equities end lower after five weeks of gains
May 12, 2007 - 1:18:16 PM

Mumbai, May 12 - Despite net purchases by both domestic and foreign funds, Indian equities finished lower during the week ended Friday to snap four straight weeks of gains as bears held a firm grip on the market amid sharp volatility.

Looking ahead, analysts expected the markets to remain choppy even as positive macro-economic trends in industrial production and inflation as well as the stability expected in Uttar Pradesh, following the Bahujan Samaj Party - poll victory, should keep the indices afloat.

'We are seeing some very strong data on industrial production and inflation also has declined, which was the most worrying factor for the corporate sector due to its impact on interest rates,' said an analyst with a leading brokerage here.

'Together with the stability that we now expect in Uttar Pradesh following the surprise verdict from the electorate there, these factors should keep the mood of investors positive,' the analyst added.

The mood of the market during the week under review can be gauged from the fact that on three out of five trading days, the barometer sensitive index - of the Bombay Stock Exchange - ended in the red.

This apart, on two occasions when the markets did end on a positive note, the gains were negligible. As the result, the key market index shed 138.11 points, or 0.99 percent, during the week at 13,796.16 points.

Most sector-specific indices also ended in the red. That for IT was down 3.11 percent, public sector enterprises -, auto - and fast moving consumer goods -. But banking index ended higher by 0.45 percent.

The Sensex had opened on a negative Monday when the 30-share index dropped 55.02 points, or 0.39 percent, at 13,879.25 points, as against the previous Friday's close at 13,934.27 points.

The losses were accentuated Tuesday, when the index shed 113.79 points, or 0.82 percent, at 13,765.46 points. Wednesday saw the index make some gains, albeit a marginal one of 16.05 points, or 0.12 percent.

But again on Thursday, the index shed 10.28 points, or 0.07 percent, and managed to make a weak gain of 24.93 points, or 0.18 percent, at 13,796.16 points. Yet, seen over the past month, the index is up 682.35 points, or 5.20 percent.

Data available with the markets watchdog Securities and Exchange Board of India showed that foreign institutional investors were net purchasers of equity worth $71.5 million during the week, and so were the domestic mutual funds.

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