The markets had a blow-hot blow-cold time through the week before signing off on the lower side as the unfolding tradegy in Japan kept the participants on tenterhooks and effectively nipped all attempts at a pullback. And the political rumblings back home only accentuated the nervousness, especially towards the fag end of the week. The Sensex ended below the 18k mark at 17,878, weaker by 295 points or 1.6% and the Nifty ended at 5374, lower by 72 points or 1.5%.
As if the double whammy in terms of the earthquake and resultant tsunami was not enough, the crippled Fukushima-1 nuclear power plant has raised fears of a nuclear holocaust, a la Chernobyl, which has been history's worst power plant accident thus far.
Among the major macro-economic developments during the week, food inflation eased marginally to 9.42% in the week ended 5 March 2011 from 9.52% in the previous week, while inflation in fuel and power rose 3.31 percentage points to 12.79%. And the RBI hiked the repo rate or the short term lending rate to 6.75% from 6.50% while the reverse repo rate or the short term borrowing rate was raised to 5.75% from 5.50% to tame high inflation. The RBI left the cash reserve ratio (CRR) and the statutory liquidity ratio (SLR) unchanged at 6% and 24%, respectively. More importantly, the central bank maintained its hawkish policy stance by signalling at further rate hikes to douse the inflation fires. Meanwhile, the Planning Commission said the Reserve Bank had taken the "right" step in hiking key policy rates by 25 basis points as inflation was above the comfort level.
On the political front, the troubles seem to be only piling up for the UPA government as the bribe-for-votes scam that first appeared during the vote on the Indo-US nuclear deal was resurrected by a Wikileaks cable leak and led to a clamour for the resignation of Prime Minister Manmohan Singh. The Government has already been riled by the Commonwealth and Adarsh scams and the CVC appointment controversy, in quick succession.
The palpable nervousness is only likely to heighten in the coming week as the rising political tempers put a span on important pending legislations at Parliament and the unravelling situation in Japan and Middle East are the known unknowns.
The Libyan crisis seems to be easing off a bit as Gaddafi has just halted the strikes on rebel elements following pressure from the internmational community. But the situation in Japan seems to be getting grim by the day as all attempts of cooling down the rods and thereby preventing a meltdown of the core part of the reactor have not met with much success thus far. And there are indications that radioactive plume has already drifted across the Pacific and reached American shores.
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The top losers on the BSE during the week were Maruti Suzuki (weakened by 7.5% at Rs 1158), HDFC (shed 6% at Rs 620) and Hindalco (lost 4% at Rs 197). ONGC, Hero Honda and Infosys were the other significant losers. Among the stocks to buck the trend, RCom strengthened by 8.5% at Rs 104, Reliance Infra gained 3.7% at Rs 627 and Tata Steel added 2.4% at Rs 596.
The midcap index ended at 6508, lower by 19 points and the smallcap index shut shop at 7797, down 102 points. In the midcap index, KGN Industries tanked by 22% at Rs 117, Jyothy Labs collapsed by 17% at Rs 196 and Sunteck Realty shed 10% at Rs 302. Wockhardt, Network Media and ARSS Infra were the other significant losers. And in the smallcap space, Twilight Li Tak slid by 23% at Rs 47, Well Pack lost 23% at Rs 22 and Splash Media lost 18% at Rs 39. Vindhya Tele, Binny and Gokaldas Export were the other major losers.
On the sectoral front, the rate-sensitive auto index weakened by 282 points or 3.2% at 8485, while the banking index ended flat at 12184. And the IT index shed 150 points or 2.4% at 5999. In the auto space, Maruti Suzuki weakened by 7.5% at Rs 1158, Hero Honda shed 3.7% at Rs 1474, M&M lost 3.4% at Rs 632 and Tata Motors lost 3.4% at Rs 1117. And in the banking space, HDFC Bank slipped by 1.3% at Rs 2153 and ICICI Bank lost 0.3% at Rs 1003, while Yes Bank lost 2.9% at Rs 274 and SBI lost 0.7% at Rs 2590.