Indian equity indices extended the downtrend for the second consecutive week as investors at large continued to avoid long positions amid an increasingly vulnerable global as well as domestic setup. The hefty position squaring in last three session of the week proved very costly for the benchmark indices as it plunged over two percent on week on week basis. Foreign institutional investors (FII) restlessly attempted to plough back their hot money from the domestic markets because of confluence of worrying economic trends like accelerating inflation, declining foreign investment and slower growth and domestic investment, that policy inertia is only making worse. The BSE Sensex lost 398.01 points or 2.18% to 17870.53 during the week ended June 17, 2011. The BSE Mid-cap index plunged by 83.49 points or 1.21% to 6814.79 and the Small-cap index declined by 113.97 points or 1.38% to 8174.49.The S&P CNX Nifty slipped by 119.40 points or 2.18% to 5366.40. On the
NSE, Bank Nifty lost 116.00 points or 1.08% to 10598.25, CNX IT sank 296.35 points or 4.45% to 6357.10 while CNX mid-cap declined 70.90 points or0.89% to 7921.15 and CNX Nifty Junior dropped 227.20 points or 2.01% to 11051.25.
The annual rate of inflation, based on monthly WPI, came much higher than the expectation at 9.06% (Provisional) for the month of May, 2011 (over May, 2010) as compared to 8.66% (Provisional) for the previous month and 10.48% during the corresponding month of the previous year. RBI furthered its aggressive stance against the rampant inflation and hiked repo rate and reverse repo rate by 25 basis points each to 7.50% and 6.50% respectively, in its mid-quarter policy review, which was in line with broader market expectations.
Read More: Equity Research Weekly Report
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