A key Indian equity markets index that had slipped to a 28-week low during the week managed to end marginally higher after three straight days of fall with the mood lifted on the last session over government assurances on retrospective taxation.
The Sensitive Index (Sensex) of the Bombay Stock Exchange (BSE) began the week on a positive note opening at 27,204.63 points, against the previous close at 27011.31 points. But on Thursday, the 30-share index closed at its lowest level since Oct 21, 2014 on tax worries.
The fall on that day, for the third successive trading session, came over and above the crash of 722.77 points, or 2.63 percent, the day before as the mood the mood turned negative over factors such as lack of clarity on retrospective taxation and muted corporate results.
The index had closed 50.45 points, or 0.18 percent, down on Tuesday and 479.28 points, or 1.77 percent, up on Monday. After three days of fall, it appeared as though the Sensex will end in the red for the fourth straight week. But Friday's session came as a saviour.
"The Indian markets remained in a consolidation mode this week and traded in a tight range. The key indices, too, traded in a narrow range through the week. Indian equities closed with small gains during the week ended May 08, 2015," said brokerage Sharekhan.
Through the week, save the last trading session on Friday, the market mood remained subdued due to continuing uncertainties over tax policies, rising coil prices and falling value of the rupee that had taken it to a 20-month low against the dollar.
Analysts said there was also persistent selling by foreign institutional investors, as concerns regarding the minimum alternate tax regime continue to float with the weakening of the rupee and a re-bound in the global crude oil prices adding to the bearish fuel.
Foreign funds were net sellers in the equities market to the tune of Rs.6,553.44 crore.
The mood was lifted by government assurances to remedy its tax policy. Finance Minister Arun Jaitley told parliament that the issue of minimum alternate tax dispute with foreign funds was now with a panel led by Law Commission chairman A.P. Shah with a request for early suggestions.
"The decline in crude oil prices overnight on Thursday-Friday and rupee's recovery against the dollar after the recent steep slide also helped boost sentiment on the domestic bourses," said another leading brokerage HDFC Securities.
During the week, 10 out of the 30 shares, which make up the Sensex basket, ended in the red, while 20 others closed with gains.
The gainers were led by Bajaj Auto, up 9.23 percent at Rs.2129.35, Hindalco, up 7.71 percent at Rs.139.00, Hindustan Unilever, up 5.31 percent at Rs.894.60, Bharti Airtel, up 4.27 percent at Rs.397.95 and Vedanta, up 3.90 percent at Rs.218.20.
The losers were led by NTPC, down 5.49 percent at Rs.142.05, Axis Bank, down 4.49 percent at Rs.542.35, ICICI Bank, down 4.32 percent at Rs.316.95, Tata Power, down 3.56 percent at Rs.73.15 and Maruti Suzuli, down 3.41 percent at Rs.3,604.85.
Looking ahead, analysts said much depended on the government and related action.
"In the coming week, next batch of fourth quarter results, macro-economic data and proceedings in parliament will dictate near term trend on the bourses. Trend in investment by foreign and domestic institutional investors will be keenly watched," said Sharekhan.
