Sensex slips below 15K

Snapping previous weeks’ gaining streak, the Sensex this week dipped 2 per cent, retreating below the 15,000 mark. With interest rates rising and inflation forging ahead of the 12 per cent mark (it stood at 12.44 per cent for the week ending August 2), there appears to be little relief in sight for the loss-stricken markets. Interest-sensitive sectors like realty and bankex were hit the hardest and registered slumps of 7 and 5 per cent respectively. Only oil and gas and healthcare indexes managed to hold on to their gains with 0.4 and 0.3 per cent rise respectively.

The whole week buzzed with activity. Even a decent growth rate of 5.4 per cent in the Index of Industrial Production for June failed to enthuse the stock markets. Crude prices, too, after declining steeply in earlier weeks, increased marginally and stood at $112 per barrel on August 14.

Towards the end of the week, what weakened sentiments further was the Prime Minister’s Economic Advisory Council’s report that painted a gloomy picture for the economy and predicted a drop in GDP growth rate from 9 per cent to 7.7 per cent. In addition, concern about the impact on fiscal deficit once the Sixth Central Pay Commission recommendations are implemented also led to the benchmark index declining.