It has been a weak week with redemption nowhere in sight

The week gone by was one of weakness and culminated in a crash on Friday when it lost almost 500 points. The BSE SENSEX ended with a weekly loss of 817.28 points or 4.15 per cent, to close at 19,691.81 points. The NSE NIFTY lost 229.90 points for the week or 3.89 per cent to close at 5,904.60 points. The broader indices like the BSE100, BSE200 and BSE500 lost similarly 3.99 per cent, 4.01 per cent and 3.98 per cent. The BSE SMALLCAP lost 3.28 per cent and the biggest loser was the BSE MIDCAP, which lost 4.44 per cent.

Domestic
Friday saw Foreign Institutional Investors selling over Rs 1000 crores worth while domestic institutions bought over Rs 1100 crores worth. Clearly had domestic institutions not bought on Friday the fall could have become more devastating. The only reason that one could give for the fall was the rising inflation and the expectation that within the next couple of weeks RBI would raise interest rates by a minimum of 25 basis points if not 50 basis points.