Saturday, April 30 2005 12:41 Hrs (IST) - World Time -

Mumbai: Open ownership battle in the Reliance group and Reserve Bank of India's (RBI) 25 basis point hike in reverse repo rate dragged the Sensex by 3.03 per cent during the week amid negative Foreign Institutional Investors (FIIs) activity and announcements of poor results by some major corporates.

In the week upto April 30, the Bombay Stock Exchange (BSE) Benchmark 30-share Index gradually moved downwards on sustained selling pressure and ended the week at 6154.44 as against last weekend's close of 6346.57, a net fall of 192.13 points.

Making the ownership issue public, Reliance Industries Ltd (RIL) vice chairman and managing director Anil Ambani refused to sign the accounts and alleged that there was a conspiracy to oust him from the flagship company on Wednesday (Apr 27, 2005), the day of RIL board meeting was held to consider accounts and recommendations of dividend.

The RBI's decision to raise reverse repo rate to five per cent in its annual monetary and credit policy on April 28 also triggered heavy sell-off by investors as the hike induced fears of rising interest rates and also of lower treasury profits for Public Sector Units (PSU) banks.

Operators, who initially were confined to squaring up of positions in derivatives before the April contract came to an end on Thursday (Apr 28, 2005), hammered down prices in reaction to the negative developments as well as sustained sales made by FIIs.

The sentiment was adversely affected by below-expectation earnings announced by Hindustan Lever and Grasim.

Investors took a serious view of the hike in reverse repo rate, considered as a signal for a likely surge in interest rates that in turn, would push up input costs for companies.

FIIs reported net sales of Rs 501.80 crore in the first four days of the week while domestic mutual funds made net investments of Rs 420.71 crore in the same period.

PSU bank stocks were the worst hit and as a result, the Bankex crashed by 238.08 points or 6.36 per cent to end the week at 3504.33 from previous weekend's close of 3742.41.

Brokers felt the market might continue its downslide in the next week in the light of a key meeting of the US Federal Reserve Open Market Committee on May 3.

Among other indices, the broad-based BSE-100 Index also tumbled by 103.89 points to close the week at 3313.45 from the previous weekend's close of 3417.34.

The BSE-200 Index and the Dollex-200 were quoted sharply lower at 821.02 and 313.16 at the weekend compared to the last weekend's close of 847.78 and 322.62.

The BSE-500 Index nose-dived by 80.27 points to finish the week at 2610.50 from preceding weekend's close of 2690.77 and the Dollex-30 ended the week sharply down at 1157.57 from 1190.98 at the last weekend.

On the National Stock Exchange (NSE), the S&P CNX Nifty and the S&P CNX Defty dipped by 64.85 points and 50.00 points to end the week at 1902.50 and 1508.15 against the last weekend's close of 1967.35 and 1558.15. The CNX Nifty Junior fell sharply by 161.30 points to conclude the week at 4024.40 from 4185.70 at the previous weekend.

The volume of business on the BSE and the NSE remained steady at Rs 9,456 crore and Rs 21,623 crore compared to last week's turnover of Rs 9,779 crore and Rs 21,232 crore.