IT, metal stocks lead decline on global slowdown fears

Growing fears of another recession in the US, the world's biggest economy, dragged the market lower last week. An unprecedented downgrade of the US credit rating by Standard & Poor's on Friday, 5 August 2011, led investors to reduce exposure to risky assets. The US Federal Reserve decided on Tuesday, 9 August 2011, to keep US interest rates ultra-low for two more years to avoid recession in the world's biggest economy.



The BSE Sensex slumped 466.24 points or 2.69% to 6,839.63 in the week ended Friday, 12 August 2011, a 14-month closing low. The S&P CNX Nifty dropped 138.30 points or 2.65% to 5,072.95.

The BSE Mid-Cap index lost 1.14% and the BSE Small-Cap index fell 2.48%. Both these indices outperformed the Sensex.

The Sensex is down 2,031.66 points or 10.76% from a recent high of 18,871.29 on 25 July 2011.

Trading for the week began on a weak note. Key benchmark indices fell for the fifth straight day to hit 14-month closing lows on Monday, 8 August 2011, as an unprecedented downgrade of the US credit rating by Standard & Poor's on Friday, 5 August 2011, led investors to reduce exposure to assets perceived as risky and escalated worries about global economic outlook. The BSE Sensex lost 315.69 points or 1.82% to settle at 16,990.18.

Data showing recent heavy selling by foreign institutional investors (FIIs) and growing fears of another recession in the US, the world's biggest economy, pushed Indian shares lower for the sixth day in a row on Tuesday, 9 August 2011. The BSE Sensex shed 132.27 points or 0.78% to settle at 16,857.91.

A broad-based rebound was witnessed on the domestic bourses on Wednesday, 10 August 2011, as US Federal Reserve's decision on Tuesday, 9 August 2011, to keep US interest rates ultra-low for two more years raised expectations of increase in fund inflows into high-yielding emerging markets such as India. The BSE Sensex jumped 272.60 points or 1.62% to settle at 17,130.51.

Key benchmark indices edged lower in choppy trade on Thursday, 11 August 2011, as an increase in food inflation raised concerns the central bank will stick to its tight monetary policy. The BSE Sensex was down 71.11 points or 0.42% to 17,059.40.