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Stocks review for July 14-18: markets suffers setback

The market suffered a sharp setback during the week ended July 18, as share prices crashed heavily on the Bombay Stock Exchange, despite moderate buying support from foreign institutional investors and occasionally buying by domestic institutional investors.

The BSE sensex quoted below the psychological barrier of 4200 at the close of week to 4124.81. The sensex registered a record loss of 197.17 points over the previous week's close of 4321.98, while the broadbased BSE national index also drifted low by 83.31 points to 1791.93 against the previous close of 1875.24 points.

The BSE-200 and dollex indices declined by 16.17 and 7.49 points to 399.00 and 186.02 points against the previous close of 415.17 and 193.51 points respectively.

Market sources which initially attributed the declining trend to the technical correction, however, described the downtrend as a result of sudden political developments at the Centre.

They said the major market players have postponed their purchase orders due to the internal squabbles among the ruling United Front in the wake of the DMK's decision to withdraw support to the UF government and the UF steering committee's refusal to accept the Rashtriya Janata Dal as its member.

These political developments have affected the market sentiments and the market witnessed large-scale bull liquidation in the index-based scrips throughout the week.

The market opened on a weak note and weakened further towards the end of the week.

Barring Thursday's trading session, the sensex registered decline during the week.

The total turnover on the BSE stood at Rs 40.5446 billion, lower by Rs 7.6729 billion over the previous week's turnover of Rs 48.2175 billion.

On Wednesday, the Chandrashekaran Committee appointed by the Securities and Exchange Board of India recommended that registered brokers should not deal with clients who do not have proper identification assessment. The committee also recommended that the broker should be responsible for all transactions, trades, and documents introduced by him in the market.

The FIIs made considerable purchases in the HDFC scrip, the FIIs' 30 per cent purchase limit also got over on Thursday. The scrip also came under selling pressure as soon as the FIIs stopped their purchases. The scrip lost by Rs 824 to Rs 3,923 against the previous closing price of Rs 4747.

Meanwhile, a similar trading pattern was also witnessed at the country's leading bourse, the National Stock Exchange. The NSE-50 index dropped by 39.70 points to 1181.40 points against the previous close of 1221.10.

The midcap index drifted lower by 21.00 points to 1284.40 against the previous close of 1305.40.

The total turnover on the NSE reduced sharply by Rs 4.1608 billion to Rs 86.1418 billion against the previous week's turnover of Rs 90.3526 billion.

Share prices also registered a marginal fall at the Over The Counter Exchange of India during the same period. The OTC composite index declined by 0.24 points to 76.41 points against previous close of 76.65 points.

The NSE and OTCEI remained closed on Friday on account of Id-e-Milad. However, the BSE remained open.

UNI