Sensex snaps 4-week winning streak; loses 354 points

Sensex snaps 4-week winning streak; loses 354 points

Zeebiz Bureau

Mumbai: The BSE Sensex failed to maintain its 4-week gaining momentum and fell by 354 points this week on profit booking triggered by Eurozone debt worries and Reserve Bank of India (RBI) Governor D Subbarao's hawkish tone in a speech delivered in US.

On Friday shares fell to their lowest close in four weeks on selling across sectors even as GDP growth at 5.5 percent beat estimates but it dashed hopes of a cut in interest rates.

Key benchmark indices fell in four out of five trading sessions.

The BSE Sensex fell 353.65 points or 1.99 percent to 17,429.56. Likewise, the 50-share National Stock Exchange index Nifty fell 128.20 points or 2.38 percent to settle at 5,258.50.

Foreign institutional investors (FIIs) bought shares worth net Rs 10803.90 crore in August 2012 so far (till 30 August 2012). They had purchased shares worth net Rs 10272.70 crore in July 2012. FIIs have bought shares worth net Rs 63069.70 crore in calendar 2012 so far (till 30 August 2012). FIIs offloaded shares worth a net Rs 2714.20 crore in 2011. 

Poor showing by the manufacturing sector pulled down the GDP growth to 5.5 percent in the April-June quarter, the decade's worst Q1 performance, but was a higher than the 5.3 percent estimate put out by most economists.

Although the data signalled the worst may be over, investors worry that growth will remain lethargic, but not low enough to prompt interest rate cuts from the Reserve Bank of India.

Continued disruptions in Parliament are also reducing the prospect of policy reforms during a time when the country is under threat of credit ratings downgrades from Standard & Poor's and Fitch Ratings.

As per expert, market is now concerned on whether there would be a ratings downgrade of India and how would foreign investors react to it.