Saturday, March 26 2005 14:06 Hrs (IST) - World Time -

Mumbai: Adverse factors such as high crude oil prices, hike in US interest rates and low retail and institutional participation due to approaching fiscal yearend led to stocks meltdown on bourses sending the Sensex reeling down by 3.46 per cent during the week.

In the week to March 26, the Bombay stock Exchange (BSE) Benchmark 30-share Index fluctuated in a wide range of 6734.72 and 6412.89 in volatile trade before ending the week at 6442.87 against last weekend's close of 6700.34, a net fall of 257.47 points.

Investors seemed to be worried over rising global oil prices, which moved downwards from the all-time of $ 57.60 a barrel to below $ 54 level during the week. In the long term, high oil prices pose a threat to economic growth.

Operators and retailers remained sellers throughout the week ahead of the financial yearend amid a drastic fall in Foreign Institutional Investors (FII) inflows. FIIs reported a negligible net investments of Rs 1.30 crore in the first two days of the week.

The US Federal Reserve hiked the interest rates by 0.25 percentage point to 2.75 per cent late Tuesday (Mar 22, 2005) and also hinted further rate hikes to contain inflationary trend, which in turn, triggered increased selling pressure on the bourses.

Investors fear that FII activity could slow down further if global interest rates continued to head upwards following the Fed rate hike.

The top heavyweight, RIL, however, attracted brisk activity on speculations that the long-drawn ownership rift between Ambani brothers had more or less been resolved.

The volume of business was very low.