Mumbai: In its biggest weekly loss in three years, the BSE benchmark Sensex extended its falling trend for the second consecutive week by plunging 1,107.42 points due to all-round selling pressure in view of declining crude prices and caution ahead of key macroeconomic data.
Shares of refinery, capital goods, realty, metal, power, IT and Teck sectors were the pacesetters in the decline.
Losses in RIL, ONGC and Gail India weighed on benchmark indices following fall in global oil prices.
A sustained drop in oil, which will hit margins of petroleum firms, is being seen as a sign of weakness in the global economy, traders said.
Strong US job growth that may prompt the Federal Reserve to speed up interest rate hikes in the world's largest economy also weighed on the sentiments.
Market sentiments were also affected by a major development in which Infosys co-founders N R Narayana Murthy, Nandan Nilekani, K Dinesh and S D Shibulal sold a total 3.26 crore shares of the company in bulk deals on December 8.
Worries over the slowdown in capital inflows ahead of Christmas holidays also weighed on the market as on the last four days of the week FPIs were net sellers. They picked up shares worth Rs 4,984.53 crore (reflection of block deal of Infosys at NSE) but sold stocks worth Rs 1,743.75 crore in the last four days.
The Sensex resumed almost stable and touched a high of 28,454.85 before falling back to 27,320.05. It concluded at more-than six-week low of 27,350.68, disclosing a sharp fall of 1,107.42 points of 3.89 per cent -- the worst weekly drop since December 2011.
It has dropped by 1,343.31 points or 4.68 per cent in the two weeks.
The CNX 50-share Nifty also dropped by 314.20 points or 3.68 per cent to end at 8,224.10.
Weak Chinese stocks after country's securities clearing house tightened use of corporate bonds as collateral for short-term financing, fall in Germany's export, political uncertainty in Greece and rout in oil prices also had a sentimental impact on the market.
"There was weakness across sectors, which was brought about by the global concerns. Markets are concerned about a global slowdown, as reflected in demand from major oil producing organisations," said Dipen Shah, Head- PCG Research, Kotak Securities.
Jignesh Chaudhary, Head of Research, Veracity Broking Services said,"The Indian equity markets observed corrections on profit booking in the last trading week. The markets also witnessed some of the major blue chips breakdown such as RIL, ONGC, Gail India, BHEL, Hindalco, Infosys, TCS, Tata Power, NTPC, Tata Motors, Wipro, Bharti Airtel, HDFC and ICICI Bank. Some of them were affected due to the falling Crude Prices in the International Markets."
"There were also some strong USD data which were observed last week. All the traders/investors were looking for the Inflation data which was scheduled yesterday after market hours and later came as a mixed, expecting that inflation data would be the lowest; this would certainly help the Indian Markets to grow in the coming week," he added.
"The US Economy also has some of the important data release which is scheduled such as Core CPI and manufacturing index data which is expected to be mixed so this would also affect the Markets in the coming week. In the coming week we might expect some positive trend in the markets so CNX Nifty is expected to trade in the range of 8195 to 8300," he further commented.
Rising gold imports widened current account deficit to USD 10.1 billion, or 2.1 per cent, of GDP in July-September quarter of this fiscal, up from 1.2 per cent a year ago also the another factor behind selling of equity shares.
The Indian rupee fell to ten-month low levels of 62.50 against the greenback.
Meanwhile, retail inflation fell to 4.38 pct in November from 5.52 pct in October, a development
that can strengthen the case for interest rate cut by the apex bank while Index of Industrial Production (IIP) dashed hopes of recovery and contracts 4.2 pct in October against a rise of 2.8 pct (revised) in September.
Overall, 27 scrips out of the 30-share Sensex pack ended lower while only Coal India (+2.63), ITC (+1.07) and Sun Pharma (+2.52) closed higher.
Major losers were Tata Steel (12.47 pct), SSLT (10.82 pct), Gail India (9.76 pct), BHEL (9.17 pct), ONGC (7.90 pct), RIL (7.74 pct), Wipro (6.55 pct), Infosys (6.31 pct), Hindalco (6.00 pct), NTPC (5.71 pct), Tata Power (5.66 pct), TCS (4.76 pct), Bajaj Auto (3.74 pct) and Axis Bank (3.07 pct).
Among the S&P BSE sectoral indices, Oil&Gas tumbled by 7.26 pct followed by CG 7.23 pct, Realty 7.20 pct, Metal 5.91 pct, Power 5.71 pct, IT 5.16 pct, Teck 4.96 pct, CD 3.95 pct, Auto 3.49 pct and Bankex 2.36 pct.
Small-cap and Mid-cap Indices also fell by 3.54 pct and 3.71 per cent respectively due to heavy selling pressure from retail investors.
The total turnover at BSE and NSE dropped further to Rs 15,528.21 crores and Rs 87,203.08 crores during the week as as against the last weekend's levels of Rs 18,072.01 crores and Rs 89,302.23 crs.
