Saturday, February 19 2005 13:33 Hrs (IST) - World Time -

Mumbai: Despite a sharp increase in Foreign Institutional Investments (FII) activity in the week under review, the sensex ended 0.75 per cent lower, cutting short the four-week winning streak, as operators played a spoilsport by booking profits throughout.

In the week to February 19, the Bombay Stock Exchange (BSE) Benchmark 30-share Index moved in a wide range of 6719.20 and 6532.50 before ending the week at 6584.32 as against last weekend's close of 6633.76, a net fall of 49.44 points.

FIIs pumped in heavy funds to the tune of Rs 2054.60 crore in the first four days of the week. As per figures released by the Securities and Exchange Board of India (SEBI), FIIs net purchases touched a massive Rs 5868 crore in the month till February 17 compared to relatively small investments of Rs 1246 crore in January.

Despite the dramatic increase in FII activity, operators, which are holding high outstanding positions, and retailers remained cautious preferring to reduce their commitments in the absence of any clear indications on the budget proposals.

A stiff opposition by the Left Parties to banking reforms ahead of the union budget to be presented on February 28, seemed to be the prime factor for domestic investors to turn heavy sellers.

The Left parties have charged the United Progressive Alliance (UPA) Government with deliberately meddling with the independent role of the Reserve Bank of India (RBI) in fixing norms on Foreign Direct Investment (FDI) and voting rights.

Meanwhile, the market discounted reports that Life Insurance Corporation (LIC) is likely to step up its market exposure to ten per cent of its investible funds from its current 7-8 per cent.

The market, however, welcomed the appointment of former UTI chief M Damodaran as SEBI Chairman on Friday (Feb 18, 2005). He had played a successful role in turning around UTI AMC as well as in restoring investor confidence in the country's largest mutual fund and ensuring orderly closure of the US-64 scheme.

Inflation also fell for the tenth consecutive week to 5.01 per cent in the week ended February 5.

Among other indices, the broad-based BSE-100 Index fell by 34.38 points to end at 3551.07 from last weekend's close of 3585.45.

The BSE-200 Index and the Dollex 200 were quoted sharply down at 882.00 and 334.95 at the weekend compared to last weekend's close of 891.66 and 339.01 respectively.

The BSE-500 Index dropped by 31.79 points to finish the week at 2779.67 from preceding weekend's close of 2841.86 and the Dollex-30 ended the week lower at 1233.06 from 1243.74 at the last weekend.

On the National Stock Exchange (NSE), the S&P CNX Nifty and the S&P CNX Defty dipped by 26.50 points and 21.75 points to close the week at 2055.55 and 1626.50 from last weekend's close of 2082.05 and 1648.25 respectively.

The CNX Nifty Junior moved down by 64.75 points to finish the week at 4318.15 from 4382.90 at the preceding weekend.

During the week, the volume of business on BSE and NSE was relatively low at Rs 11,037 crore and Rs 23,355 crore compared to Rs 12,108 crore and Rs 25,080 crore respectively last week.