Sensex-Nifty plunge

Volatility was the buzz word all of this week as the markets witnessed several ups and downs.

Volatility was the buzz word all of this week as the markets witnessed several ups and downs. As if the previous weeks massive slide was not enough,the bulls got a jolt at the start of this week on a heavy volume day. The Sensex shed a whopping 468 points on Monday,dragging the banking sector down with it,on expectations that RBI would raise its interest rates to curb inflation. Mid-week,however,unfavourable IIP data failed to further dampen sentiments sending the markets considerably higher,recovering almost all of the weeks earlier losses.

As per the IIP data,growth nosedived to 2.7 per cent in November 2010 against 11.3 per cent in the same period a year ago,pulled down by the dismal performance of the manufacturing sector.

Unfortunately,bulls were unable to maintain the new found momentum and began to lose ground during the rest of the week. Stronger inflation numbers didnt support the market as they continue to be in the high double digits.

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The BSE Sensex closed the week at 18,860 down an incredible 831 points or 4.22 per cent from the previous weeks close of 19,691.81. During the week the Sensex made a high of 19,720.43 and a low of 18,811.96,a range of 908 points. The NSE 50-share Nifty ended at 5,654.55 down 250 points or 4.24 per cent.

Driven by better account management,healthy addition of new clients and strong growth in Europe,s posted a 14.2 per cent growth in its net profit. This however,was below analyst expectation,and markets will look to rival,TCS,to reverse the trend in the IT space. In other news,reports stated that unlisted company,Indigo,has signed an agreement to buy 180 Airbus A320 aircraft in a record sale worth $16.4 billion. JetAirways,would also add 49 aircrafts over the next three to five years.

Priyanka Vasudevan

Author is Research Analyst,Fullerton Securities & Wealth Advisors