By IANS
Mumbai : Reduction of interest rates by the US Federal Reserve and then two successive all-time highs led the Indian stock market benchmark indices to consolidate during the week ended Friday.
The Bombay Stock Exchange’s sensitive index (Sensex) scaled new peaks of 20,419.11 and 20,498 points during the week even as the US Federal Reserve reduced interest rates by 25 basis points that had sent other major Asian markets into dizzy.
Three out of the five sessions during the week ended in the red as mutual funds turned out to be net sellers. Thus, for the week ended Dec 14, the Sensex gained 0.3 percent while the broader 50-share S&P (CNX) Nifty index of the National Stock Exchange (NSE) gained 1.2 percent.
The week began on a cautious note, with the key index losing 35 points and the Nifty down by 14 points Monday. Tuesday witnessed a reversal of sentiments as buying action in aluminium, energy and telecom stocks led the Sensex to scale the 20K summit.
It gained 383 points while the Nifty added 130 points. Asian, American and European indices indicated negative cues Wednesday as the US Federal Reserve cut its Fed funds rate by 0.25 percent against an expectation of 0.5 percent from some large investors.
However, the Indian markets did not follow the cues as the Sensex closed 40 points higher while the Nifty gained 62 points.
Thursday witnessed the true impact of the Fed rate cut. Even RBI Governor Y.V. Reddy’s observation that the decision by the US Federal Reserve to cut interest rates is relevant to Indian monetary policy but not a determining factor, failed to enthuse the Indian investors enough. The Sensex closed 271 points lower while the Nifty lost 101 points.
Friday turned out to be a fairly volatile day of trade with software, banking and telecom stocks bearing the brunt of profit booking. The Sensex closed at 20,031 (down 74 points) while the Nifty closed at 6,048 (down 10 points).
On the institutional activity front from Dec 7-13, foreign institutional investors (FII) were net buyers to the tune of Rs.21 billion, while mutual funds sold equities worth Rs.554 million.
On the sectoral indices front, BSE Smallcap (eight percent), BSE Healthcare (eight percent) and BSE Metal (six percent) featured among the key gainers.