MUMBAI: After witnessing one of their worst falls in recent months on Thursday, the domestic equity markets closed the day marginally higher, but posted their worst weekly fall since July 2009 as weaker than expected corporate earnings growth and turbulence in the global economy continued to keep investors away from riskier assets. After swinging wildly between the positive and negative territory, the Sensex closed the session at 22,986.12, up 34.29 points or 0.15 per cent on Friday, but registered a loss of 6.62 per cent on a weekly basis. Similarly, the broader Nifty recorded a weekly loss of 6.78 per cent to end the day at 6,980.95.
While the markets witnessed a bounce back from their day’s low on the back of short covering, stock market dealers said that the underlying sentiment remains extremely bearish and the markets are expected to see further corrections in the coming days. According to them, most of the global markets have entered a long-term bearish phase and investors are likely to seek the safety of gold in the coming days. “In 2008, the crisis was restricted to major banks in the US. However, we are now seeing a crisis in three sectors spread across geographies, which are banking, metals and oil. Major banks in Europe and China are grappling with the issue of high non-performing assets owing to their exposure to the oil and metal sectors. Even domestic banks are facing a similar issue. Now there are talks about crude oil prices slipping below $15 per dollar in which case most of the oil producing and exporting countries are going to face huge losses,” said Alex Mathews, head of research at Geojit BNP Paribas Financial Services.
On Friday, the broader markets remained extremely weak with 1,730 stocks traded on the BSE closing the day in the red as compared to 851 stocks that advanced. “What we saw today was a technical bounce back on the back of short covering. There are lot of investors who have entered the markets at higher levels. They are waiting for an opportunity to exit. So at every rise, we can expect fresh selling to emerge,” said Uday Narayan Dubey, vice-president, institutional desk at R.K.Global.
