Mumbai | The BSE benchmark Sensex and NSE Nifty dropped by more than two per cent this week in spite of fag-end recovery in the domestic equity market following Economic Survey which came days before the Union Budget projected the economy to grow at 7-7.75 per cent in 2016-17.
The Survey estimated growth at 7-7.75 per cent for the next fiscal while pressing for more reforms, subsidy cuts and sticking to the fiscal consolidation plan. Optimistic investors were seen widening their bets on the last day today ahead of the Budget on Monday, encouraged by the Economic Survey, a Delhi-based stock broker Manoj Choraria said. Asia rallied on the last day of the week after China’s central bank chief said Beijing still has enough monetary firepower to keep the world’s second-largest economy on track as G20 ministers gathered in Shanghai.
US stocks closed slightly lower yesterday, but logged a second straight weekly gain as oil prices stabilized.
The rail budget failed to calm the nerves of jittery investors amid a continuing sell-off and as the Sensex dropped by 112.93 points on that day even as Railway Minister Suresh Prabhu proposed increasing capital outlay for the Railways, the world’s fourth-largest rail network, by 21 per cent to Rs 1.21 lakh crore. The Indian rupee hitting a fresh 30-month low to 68.79 weighed on the sentiment, said Hem Securities Director Gaurav Jain. Persistent foreign capital outflows also affected the market sentiment. The Sensex dropped by 554.85 points or 2.34 per cent to end the week at 23,154.30 after moving in a range of 23,855.04 and 22,948.10. The NSE 50-share index also tumbled by 181.00 points or 2.51 per cent to 7,029.75.
The total turnover at BSE and NSE dropped further to Rs 10,956.21 crore and Rs 70,706.22 crore, respectively, as against the last weekend’s level of Rs 13,430.93 crore and Rs 77,649.74 crore.
The rupee ended the week lower by 16 paise to 68.62 against American currency on persistent dollar demand from banks and importers in view of sustained foreign capital outflows amid fall in domestic equity market on the back of higher dollar overseas. The domestic unit resumed lower at 68.60 per dollar at the Interbank Foreign Exchange (Forex) market as against the last weekend’s level of 68.46 per dollar and dropped further to fresh 30-month low at 68.79 per dollar on month-end dollar demand from importers. However, it recovered to 68.45 before closing at 68.62 per dollar, still showing a loss of 16 paise or 0.23 per cent. The rupee has tumbled by 98 paise or 1.45 per cent in three weeks. The rupee hovered in a range of 68.45 per dollar and 68.79 per dollar during week.
The rupee had last ended at 68.80 per dollar on August 28, 2013 after touching 68.85 during intra-day trade on the same day.
The benchmark Sensex showed a weekly loss of 554.85 points or 2.34 per cent to end the week at 23,154.30. The Sensex recovered by 178 points or 0.78 per cent on Friday on fag-end buying ahead of the Union Budget after the Economic Survey projected the Indian economy to grow at 7-7.75 per cent in 2016-17, which could accelerate to 8 per cent in a couple of years. However, the Sensex showed a weekly loss of 554.85 points or 2.34 per cent to end the week at 23,154.30.
In New York market, the dollar surged against its main rivals yesterday and logged its first weekly gain out of four against the Japanese yen after a raft of economic data challenged the idea the US is tipping toward recession. Stronger economic reports might embolden select Federal Reserve policy makers who believe the group should be open to raising interest rates at the Feds next meeting in March, lifting the appeal of dollar-denominated assets.
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