Hopes of stimulus package and expectations of a further rate cut by the central bank to boost the economy helped key benchmark indices cut early losses. The market edged lower in three out of five trading sessions. Small and mid-cap stocks outperformed the market.
The BSE 30-share Sensex lost 127.52 points or 1.40 per cent to 8,965.20 in the week ended on Friday. The S&P CNX Nifty declined 40.70 points or 1.47 per cent to 2714.40 in the week.
The BSE Mid-Cap gained 46.48 points or 1.63 per cent to 2,892.95 and the BSE Small-Cap index rose 25.81 points or 0.78 per cent to 3,323.54 in the week. Both the indices outperformed the Sensex.
Sustained selling by the foreign institutional investors (FII) to shore up resources to beat the global liquidity crunch, have weighed heavily on the bourses since 2008. FIIs outflow reached Rs 54,521.80 crore in calendar 2008, till 4 December 2008.
Trading for the week started on a dull note as weak European indices, fall in US index futures and dismal economic data heightened concerns about the weakening domestic and global economy on Monday. The BSE 30-share Sensex lost 252.85 points, or 2.78 per cent, to 8.839.87 and the S&P CNX Nifty slipped 72.20 points, or 2.62 per cent, to 2,682.90.
The market extended losses the next day. The BSE 30-share Sensex was down 100.63 points and the S&P CNX Nifty fell 25.10 points, or 0.94 per cent, to 2,657.80 on Tuesday.
Hopes of government measures to boost domestic economy, easing margin norms and firm Asian stocks supported domestic bourses on Wednesday. The BSE 30-share Sensex was up 8.19 points, or 0.09 per cent, to 8,747.43.
Hopes of a cut in interest rates, firm European stocks and rebound in US index futures boosted the domestic bourses on Thursday. The BSE 30-share Sensex jumped 482.32 points, or 5.51 per cent, to 9,229.75 and the S&P CNX Nifty jumped 131.55 points, or 4.95 per cent, to 2,788
A sell-off in index heavyweights on concerns about the weakening global economy dragged market lower on Friday. The BSE 30-share Sensex lost 264.55 points or 2.87 per cent at 8,965.20 and the S&P CNX Nifty fell 73.60 points or 2.64 per cent to 2714.40 on that day.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 1.15 per cent to Rs 1,118.60 on concerns a global slowdown would hit demand for petrochemicals.
Real estate stocks rose on reports the government will unveil measures for the realty sector, which may include incentives for low-cost housing and lower loan rates, on Saturday. Indiabulls Real Estate (up 9.75 per cent to Rs 103.60), DLF (up 2.47 per cent to Rs 203.15), Unitech (up 33.33 per cent to Rs 30.80), gained.
Banking stocks were mixed despite reports the Reserve Bank of India (RBI) may come out with cuts in repo rate and reverse repo rate on Saturday to stimulate growth
India's largest commercial bank State Bank of India (SBI) rose 4.48 per cent to Rs 1135.60. India's largest private sector bank by net profit ICICI Bank rose 2.01 per cent to Rs 358.45. However India's second largest private sector bank by net profit HDFC Bank slipped 3.42 per cent to Rs 888.95
Most auto stocks slipped on dismal November 2008 monthly sales figures. India's largest tractor maker by sales Mahindra & Mahindra lost 10.46 per cent to Rs 252.20 after total vehicle sales (excluding tractors) declined 41 per cent at 10,430 units in November 2008 over November 2007.
India's largest motorbike maker by sales Hero Honda Motors fell 4.91 per cent to Rs 761.50 after two-wheeler sales rose a marginal 0.5 per cent to 2,89,426 units in November 2008 over November 2007.
India's largest scooter maker by sales Bajaj Auto slipped 1.82 per cent to Rs 315 on 37 per cent fall in two-wheelers sales to 1,32,421 units in November 2008 over November 2007.
India's largest car maker by sales Maruti Suzuki India declined 8.50 per cent to Rs 490.30 on 24.4 per cent fall in sales to 52,711 units in November 2008 over November 2007. The company unveiled the monthly sales data during trading hours on Monday.
However India's largest commercial vehicle maker by sales Tata Motors gained 12.28 per cent to Rs 153.10 on reports the government is mulling excise duty cut on trucks and buses as well as extending the special line of credit for non banking financial companies that are instrumental in financing commerical vehicle sales.
IT stocks slipped on worries about the US economy which is already into a recession for a year now. Satyam Computer Services (down 7.65 per cent to Rs 224.40), Infosys (down 8.46 per cent to Rs 1135.70), Wipro (down 6.65 per cent to Rs 227.15), and Tata Consultancy Services (down 6.51 per cent. to Rs 521.70), slipped.
Indian IT firms derive a large part of revenue from exports to the United States.
India's largest steel maker by sales Tata Steel jumped 21.10 per cent to Rs 182.80 after the company reported 215.77 per cent surge in consolidated net profit to Rs 4703.64 crore on a 36.17 per cent increase in total income to Rs 44283.34 crore in Q2 September 2008 over Q2 September 2007, on December 2.
State run oil marketing companies slipped on reports the government is mulling a hefty reduction in fuel prices. BPCL (down 3.90 per cent to Rs 340.30), HPCL (down 5.3 per cent to Rs 224.20), and Indian Oil Corporation (down 6.22 per cent to Rs 383.95), declined.
Among the side counters, NDTV (up 42.72 per cent), Sun TV (up 30.59 per cent), LIC Housing Finance (up 29.26 per cent), and EIH (up 27.26 per cent), jumped.
However, Bombay Rayon Fashions (down 16.19 per cent), Rolta India (down 15.28 per cent), and Mercator Lines (down 14.10 per cent), slipped.
The stock market regulator Securities & Exchange Board of India (Sebi), on Tuesday, extended the facility of cross margining across cash and derivatives segments to all categories of market participants.
Exports declined an annual 12.1 per cent to $12.82 billion in October 2008, the first year-on-year fall in nearly three years, as slowing output at home and weakening economies in key overseas markets slashed demand, data released on Monday, 1 December 2008 showed.
Inflation based on the wholesale price index rose 8.4 per cent in the year through November 22, lower than previous week's 8.84 per cent rise, data released by the government on December 4 showed.
The Bank of England slashed interest rates by a full per centage point on December 4 to shore up Britain's crumbling economy and head off the threat of deflation. The cut took rates to 2 per cent their lowest level since 1951. The central bank in Sweden slashed its key interest rate by a record 175 basis points to 2 per cent, a shock move to try and prevent the economy from sliding deeper into recession. On the same day, the European Central Bank dropped its benchmark rate by 0.75 per centage point.
Meanwhile the US economy entered a recession a year ago this month, the panel that dates American business expansion said on December 1. Federal Reserve Chairman Ben Bernanke said the central bank is mulling extreme policy measures such as buying more government bonds to revive growth.