PFW Bureau / June 9

The nervousness in the world market, an upward interest rate bias globally and profit booking at the higher levels have led to a dip in the domestic equity markets last week ended on June 8. The future direction of both the leading bourses depend on the arrival of the Monsoon next week.

The Bombay Stock Exchange (BSE)'s Sensex shed 3.4% or 507 points to close at 14,063 points during the last week between June 4 to 8. Likewise, the National Stock Exchange (NSE) S&P CNX Nifty went southward by 3.5% or 152 points to close at 4,145 points during the corresponding period.

At BSE, a majority of the sectoral indices including Bankex, PSU, OIL and Metal ended in red at the close of the market on Friday. The BSE Mid-Cap and Small-Cap were also hit in this meltdown. However, the BSE IT could gain marginally up by 78 points during the said period.

The market experts said that there were several reasons for the market going southward. The weakness in the global market was the main reason for the dip in both the indices. The investors also booked profits at the higher levels with an apprehension that the indices may slip into the meltdown mode.

Both the bourses – BSE & NSE – lost a combined market capitalization (M-Cap) of Rs 2,56,987 crore during this period. Out of this, the M-Cap of BSE eroded by Rs 1,27,532 crore and NSE's by Rs 1,29,455 crore.

According to the data available with Securities and Exchange Board of India (SEBI), the Foreign Institutional Investors (FIIs) were the net sellers at Rs 106 crore and Mutual Funds (MFs) were the net sellers at Rs 107 crore in the equity market last week.

However, the market has a positive factor in its favour. The inflation has come down to 4.85% for the week ended on May 26.

Indian Meterological Department (IMD) has projected a rainfall in next three to four days. The positive sentiments in the market will revive if the monsoon comes on the expected time. The direction of the market movement will depend on the arrival of the monsoon next week.