Sunday, January 27, 2008

No ordinary thriller this!

The markets witnessed unprecedented volatility this week, with losses and recoveries of a 1,000 points becoming par for the course. The magnitude of the volatility could be gauged from the fact that the week was witness to both the highest ever single day loss as well as single day gain on an absolute basis on the Sensex. However, in the end it were the bears that triumphed, pulling the Sensex down by a little more than 3% and the Nifty down by nearly 6%

The week began on a disastrous note as the indices plummeted throughout the day to clock the biggest ever fall in the Indian stock market history. The Sensex lost 1,408 points while the Nifty shed 497 points on Monday. The bloodbath continued on Tuesday as the indices struggled to recover from the day's lows at which point the Sensex had shed more than 2,000 points. The day ended with the Sensex closing 875 points lower while the Nifty lost 289 points. The US Fed played the knight in shining armour on Wednesday enabling the broader markets to close well above the dotted line. Index heavyweights from the power and software sectors registered gains amidst buying activity across the board. The Sensex gained 864 points while the Nifty accumulated 319 points.

It looked like it would be an encore performance on Thursday, but it turned out to be quite the opposite as the day wore on. The Sensex closed lower by 372 points after a steady decline during the latter part of the day. The Nifty lost 169 points. Select index heavyweights from the telecom sector registered gains while stocks from the power sector bore the brunt of selling activity. Inspired by their global counterparts, the bulls on the Indian indices were back with a huge bang on Friday, enabling the Sensex to record its biggest ever one day rise on an absolute basis.

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