The Indian equities market was battered by weak global market and budget blues this week. The hike in short term capital gains tax in the 2008-09 budget did not go well with the capital market at all. The 30-share sensitive index of the Bombay Stock Exchange, the Sensex, fell in three out of four trading sessions in the week. The market was closed Thursday on account of Shivratri. Sensex crashed by another 566.56 points or 3.4 per cent on Friday, bringing it below the 16,000 mark to close at 15,975.52, lowest since September 18, 2007. The Nifty index also dropped 149.80, or 3 per cent, to 4,771.60.
After Friday’s fall, the Bombay Stock Exchange’s index slumped 9.1 per cent this week, its steepest weekly decline in 21 months since May 2006, with 27 out of 30 stocks falling. All 13 industry indexes on the exchange dropped by between 1.1 per cent and 6.6 per cent and eight stocks fell for each that rose.
The SBI’s assets fell to its lowest in more than four months after finance minister P Chidambaram said lenders should consider cutting rates on home loans. ICICI Bank registered its biggest losses in 10 months the banking index recorded its biggest weekly fall since May ’04.
Foreign institutional investors (FIIs) were net buyers of shares worth Rs.17.33 billion in February. But overall in 2008, by March 4 they were net sellers worth Rs.127.03 billion. Mutual funds bought shares worth Rs.5.14 billion in February.
The selling pressure last week was unabated and right across sectors, mirroring the weakness in the global stock markets. The Sensex tumbled 900.84 points or 5.12 percent to 16,677.88 Monday, March 3 2008, registering its second biggest single day loss. It was also the Sensex's second biggest single day fall in percentage terms, with 26 out of 30 stocks that form the Sensex pack ending in the red.