Three weeks of gains snapped in Indian stock market

Mumbai - Indian equities slipped on the Greek crisis and fears of a Chinese market meltdown during weekly trade ended July 10, as investors were reluctant to chase higher prices in a time of uncertainty.
However, the drastic impact of the two crises was somewhat belied by hopes of a healthy first-quarter results season, a positive US Federal Reserve stand on rate cuts, the good progress of monsoon and a downtrend in crude oil prices.
The barometer index of the Indian equity markets, the 30-scrip Sensitive Index of the S&P Bombay Stock Exchange, lost 431.39 points or 1.53 per cent during the weekly trade ended July 10.
The index closed at 27,661.40 points in the week under review from the previous closing of 28,092.79 points on July 3. The downfall comes after three consecutive weeks of gains. The Sensex had ended the previous weekly trade at 28,092.79 points from the previous weekly closing of 27,811.84 points on June 26.
Investor sentiments were impacted by the Greek rejection through the July 4 referendum on the new terms of a bailout package.
Other negative factors - like the continuous slide in the Chinese markets for a while that has now eroded nearly 40 per cent of its stock value - also caused panic. More importantly, the inability of the Chinese government, fund houses and brokerage firms to arrest the fall led to global selloffs.
"Initially in the week gone by, there was optimism that the Greece crisis will be resolved and there wouldn't be any spill-over effects on India. There was also good data on crude oil prices, monsoon progress and the US Fed's indication of a delay in rate hike," Anand James, co-head of the technical research desk at Geojit BNP Paribas, told IANS. "However, as the week progressed, international selloffs due to China coupled-with a stalemate in Greece debt talks and anxiety over the Q1 results caused panic and selloff here. Investors weren't interested in chasing higher prices in uncertain times."
Markets started the week on a healthy note. On Monday, it chose to ignore the "no" vote in Greece and instead focused on a likely delay in US interest rate cuts. It gained 116 points or 0.40 per cent on Monday.
After that point, the downturn began; the markets on Tuesday closed flat, some 37 points or 0.13 per cent down. The barometer index lost 484 points on Wednesday and 114 points on Thursday.
It gained some traction on Friday and rose 87.74 points or 0.32 per cent.
Devendra Nevgi, chief executive of ZyFin Advisors, said: "All the asset classes of the Indian markets be it currency, equity and bond showed good resilience towards the two crises. That's the reason why the fall was short-lived and the impact was mitigated," Nevgi told IANS.