Correction continues in the markets during the week as global weakness persists

The week saw the stock market indices slipping further as weakness continued across most global markets. Concerns about slowing US economic growth and rising interest rates affected most markets. There were also reports of fund selling ahead of the holiday season in western countries, which has become an annual cycle.

The rupee weakness against the US dollar continued during the week as the Indian currency slipped below the psychologically important mark of Rs45 to a dollar. The strength of the dollar against most currencies is discouraging most international fund managers from investing fresh money.

Markets opened the week on a relatively firm note and turned volatile. The indices slipped in and out of the red on Monday before closing flat. The volatility continued on Tuesday as well as the indices crashed after a very strong opening.

The downtrend persisted on Wednesday as markets across the globe lost considerable ground. Both the Sensex and Nifty lost close to 2 per cent each. Thursday started with a strong bounce back in early trades, only to tumble once again in late trades. The Sensex slipped below the 8000 mark and the Nifty closed below 2400.

The much awaited recovery or pull-back finally came on Friday, despite global markets remaining weak. The indices recovered from early weakness and rallied strongly for the rest of the day to close with gains of close to 2 per cent each.

The Sensex lost 132 points or over one and a half per cent during the week and the Nifty shed 40 points or more than one and a half per cent over the week.

Mid-caps were worse off during the week as the index declined on the first four days of the week. Even the recovery on Friday was not as strong as the frontline stocks. The only positive sign was the strong gains for popular mid-cap stocks on Friday. The CNX Mid-Cap 100 index lost 105 points or close to 3 per cent during the week.