The Bombay Stock Exchange benchmark Sensex failed to maintain last week’s gains by slipping over 633 points during the week on fresh selling pressure due to concerns over the government’s inability to continue with policy reforms after it suspended plans to allow FDI in multi-brand retail.
Concerns over the outcome of European Union summit also spooked the domestic sentiment.
The 30-share Sensex fell 633.37 points or 3.76 per cent to 16,213.46 from its last week-end level. The 50-share S&P CNX Nifty also tumbled 183.45 points or 3.63 per cent to 4,866.70.
The BSE Mid-Cap index fell 2.47 per cent, while the BSE Small-Cap index dropped 2.21 per cent.
Facing a harsh political reaction that paralysed Parliament, the Congress-led UPA government put on hold plans to allow foreign multi-brand retailers like Wal-Mart to open stores in India.
Comments of the Finance Minister, Mr Pranab Mukherjee, on gloomy GDP growth also affected the market sentiment. He said surging food and fuel prices amid weak global economic growth are adversely impacting the country’s GDP growth.
The Centre also said it will not be easy to restrict the fiscal deficit to 4.6 per cent of GDP in 2011-12 due to uncertainty on the disinvestment front and a likely increase in subsidies, but maintained that the slippage will be minimal.
Heavy sell-off was seen in capital goods, realty, metal, refinery, power, banking and auto sectors.
Meanwhile, food inflation fell sharply to 6.60 per cent for the week ended November 26 against 8 per cent in the previous week.
Asian shares ended lower after a closely-watched European Union summit failed to secure the full backing of the 27 nations for treaty changes to help fight the region’s debt crisis.
From the 30-member Sensex pack, 28 shares declined and only two rose.
Interest rate sensitive banking stocks fell on profit taking after recent gains, triggered by hopes that a slowing economy could prompt the Reserve Bank of India (RBI) to pause further rate hikes.
Metal and mining shares declined as the prices of industrial metals fell. Sterlite Industries (7.35 per cent), Coal India (5.31 per cent), Tata Steel (4.92 per cent) and Hindalco Ind (2.48 per cent) and Jindal Steel (0.58 per cent) were among the losers.
Index heavyweight Reliance Industries (RIL) shed 6.83 per cent.
IT stocks outperformed the market on a weak rupee. Wipro shot up 2.5 per cent, while Infosys Tech rose 0.35 per cent.
Other losers from the Sensex pack were Bharti Airtel (8.06 per cent), ICICI Bank (7.12 per cent), BHEL (6.50 per cent), Larsen (6.39 per cent), Mahindra and Mahindra (5.92 per cent), Jaiprakash Associates (5.87 per cent), ITC (4.58 per cent), HDFC Bank (4.50 per cent), DLF (4.16 per cent), Tata Motors (4.34 per cent) and Sunpharma (3.87 per cent).
Among the major indices, the BSE-Capital goods fell sharply by 5.42 per cent, followed by the BSE-Realty 4.81 per cent, the BSE-Oil & Gas 4.62 per cent, the BSE-Metal (4.52 per cent), the BSE-Power 4.33 per cent, the BSE-IPO 3.92 per cent, the Bankex 3.73 per cent, the BSE-Auto 3.38 per cent and the BSE-PSU 3.29 per cent.
The dollex-30, the dollex-100 and the dollex-200 also dropped 5.68 per cent, 5.40 per cent and 5.28 per cent, respectively.
Total turnover on the BSE and NSE fell to Rs 8,808.57 crore and Rs 38,674.95 crore, respectively, against the last week-end level of Rs 9,980.59 crore and Rs 55,291.88 crore.