Markets hit 2-year low, end week down over 4%

It was a stressful week with the markets reacting to a constant flow of news. The Sensex dropped 4.45% and the Nifty fell 4.42% in this week

Headlines for the week

October IIP at -5.1% versus 1.9% in September

November inflation at 9.11% vs 9.73% in October

RBI leaves key interest rates unchanged

Rupee hits new record low past 54 per dollar



Indian indices

It was an action-packed week, with the markets falling over 4% and closing at two-year low. Since the start of the week, there was a continuous flow of disappointing news. Weaker-than-expected Index of Industrial Production ( IIP) data for October at -5.1%, higher inflation for November at 9.11% and an uneventful RBI credit policy dampened the sentiments this week. Rupee hitting historic low and commodity markets falling worldwide further added to the woes. Weakness across the globe on never-ending Europe worries and growth fears further led to sell-off.

Heavy selling by foreign funds also spooked investors. The Nifty closed below the psychological 4700-mark for the first time since November 3, 2009. It was a second straight week fall for markets.

The Sensex swung 935 points between a weekly high of 16360 and a low of 15425 and closed the week 4.45% or 722 points lower at 15491. The Nifty swung 282 points between a weekly high of 4910 and a low of 4628 and closed the week 4.42% or 215 points lower at 4652.

Sectoral and stock screening

All the sectors fell in this week. The major losers - BSE CG down by 10.30%, BSE CD dropped by 8.38% and BSE Realty down by 8.22%. Rest sectors stood lower in the range of 0.37-7.25%.

Coming to 'A' group stocks, top three gainers of the week - MphasiS jumped by 5.17%, Tata Communications surged by 4.88% and Divi's Laboratories gained by 4.04% Top three losers of the week - Sintex Industries tumbled by 32.26%, Essar Oil dropped by 28.78% and Pantaloon Retail (India) fell by 23.12%.

FII/MF activity

The foreign institutional investors (FIIs) were the net sellers of the Indian stocks this week to the tune of Rs1,383 crore. The domestic investors sold Indian shares worth a net of Rs6 crore during the week as on December 15, 2011.

Global indices

Worsening euro zone debt crisis and growth concerns continued to drag global stocks this week. CAC40 was the worst performer of the week falling by 6.31%, followed by DAX100 down by 4.77%, Sensex declined by 4.45%, Shanghai Composite down by 3.91% and Nasdaq slipped by 3.46%. Other global stocks slipped in the range of 1.58-2.61%.

Outlook

Markets may track global cues for direction. Volatility in currency and commodity markets is likely to impact sentiments. FII activity and developments across the globe will remain in focus.