Weekly Analysis - Jan 24 2010

Indian benchmark indices tumbled over 4% during the week for the first time this year on aggressive selling by foreign insitutional investors (FIIs) and due to China`s monetary tightening and US banks regulations. China`s central bank had declared a 50 basis points hike in banks` reserve requirement ratio (RRR) on Monday and President Barack Obama proposed new limits on the size and trading practices of big US banks on Thursday.

Another factor which weighed on the sentiment was soaring food prices continued to fall for the third consecutive week. Food inflation eased to 16.81% for the week ended Jan. 9, 2010 as against 17.28% in the previous week. Index for primary articles increased marginally to 13.93% as against 13.82% for the week ago.

The 30 share index, Sensex lost 694.62 points, or 3.96%, to 16,859.68 for the week ended Jan. 22, 2010. On the other hand, the broad based NSE Nifty plunged 216.2 points, or 4.12%, to 5,036 in the same period.

Mid-cap stocks dropped 266.75 points, or 3.78%, to 6,783.66 in the week. While small-cap shares lost 309.29 points, or 3.45%, to 8,661.17 during the week.

All the BSE sectoral indices settled in the red. The BSE Realty Index was down 8%, as DLF fell 8.5% and Unitech lost 10.4% followed by Capital Goods, which fell 6.51%, Oil & Gas lost 6.06%, HC declined 5.99%, and Power went down 4.53% among major losers in the sectoral indices over the week.

Leaders in 30-share index were Maruti Suzuki India (1.64%), Bharti Airtel (1.31%), Hero Honda Motors (1.18%), Hindustan Unilever (0.59%), and Bharat Heavy Electricals (0.04%) over the week.

On the other hand Larsen & Toubro (10.83%), Jaiprakash Associates (10.64%), D L F (8.45%), Grasim Industries (8.34%), and Tata Power Company (8.27%) were the major losers in the Sensex over the week.