Sensex sheds another 10 percent on dampened market mood

The curtailed trading session for Indian equities in the week ended Thursday saw a benchmark index end in the negative terrain for the third straight week -- resulting in a loss of 10 percent since the record high it attained on March 4.

The 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) opened slightly higher for the week at 27,565.49 points, against the previous close at 27,437.94 points. But it ended 426.63 points lower at 27,011.31 points, with a loss of 1.55 percent.

Thursday's close was the lowest since 26,908.82 points which the key index had ended on Jan 7. On Monday, the index fell 260.95 points or 0.95 percent, followed by a rise of 0.81 percent. On Wednesday and Thursday, the key index fell 0.62 percent and 0.79 percent, respectively.

At the National Stock Exchange (NSE), a similar trend was seen and the broader 50-scrip Nifty closed at 8,181.50, with a loss of 123.75 points or 1.49 percent.

The reasons attributed for the fall were many. Notable among them was the rush to square up deals for the futures and options trading for the month of April, as also the persistent worry over the government's stand on retrospective taxation on capital gains made by foreign funds.

The funds were net sellers in the secondary equity markets in India on each of the four trading days of the week under review, offloading shares worth some $725.77 million. In the past month, the market-cap of BSE-listed stocks was down Rs.178,000 crore.

"Government's stance on capital gains tax, delay in passage of key reform-centric legislative proposals, weak Q4 corporate earnings and gloomy monsoon forecast which is likely to further dent rural demand kept the risk-appetite under check," said brokerage Sharekhan.

Within the 12 sector-specific indices of the Mumbai bourse, the top loser was the one for fast moving consumer goods, down 5.19, followed by metals, down 1.98 percent and oil and gas, down 1.94 percent. The indices of banking, auto and power rose between 1.73 percent and 0.16 percent.

Among the Sensex stocks, Axis Bank was the top gainer, up 7.64 percent at Rs.567.85, followed by ICICI Bank, up 7.51 percent at Rs.331.25, Maruti, up 5.43 percent at Rs.3,732.05, Wipro, up 2.95 percent at Rs.538.55 and Sesa Sterlite, up 2.41 percent at Rs.210.00.

The losers were led by ITC, down 7.17 percent at Rs.322.25, HDFC, down 6.05 percent at Rs.1,169.40, Dr. Reddy's, down 5.10 percent at Rs.3,308.20, Hind Unilever, down 4.50 percent at Rs.849.50 and Bharti Airtel, down 4.41 percent at Rs.381.65.

Analysts do not see any drastic change in the investor mood next week.

"In the coming week, next batch of fourth quarter March 2015 results, proceedings in parliament and the outcome of monthly manufacturing and services sector surveys will dictate the near-term trend on the bourses," said Sharekhan.

"Trends in investment by foreign and domestic institutional investors will be keenly watched."