During the five trading sessions of the week from September 9-23, Sensex fell by 771 points or 4.56%. In the same time Nifty fell by 216 points or 4.26%.
The first three trading sessions saw modest gains on the stock exchange. However, at the end of two day Federal Open Market Committee (FOMC) meeting, federal reserve stated that the US economy faced severe downside risks. This observation by the fes and its decision to not go for QE3, did not bode well with the investor community. Additionally, the European debt problem too escalated as analysts started putting a time frame over when Greece will make its default.
During the same period, rupee depreciated by 4.4%. This was the biggest weekly fall in 15 years, according to business standard. Analysts consider that the liquidation of positions by institutional investors on worries of a Greece default. Furthemore, the high possibility of a recession in the developed economies too are scaring these big ticket investors are the major factors contributing to the fall of Rupee.
Even the International Monetary Fund (IMF) cut its forecast about the world's growth from 4.3% to 4% for 2011-12. This was on account of high risk of a recession in Europe and US. The news that China's manufacturing activity shrank for the third straight month to a low of 49.34 in September also scared the investors.
Indian stock markets outperformed its global peers. For the week, Dow Jones Industrial Average (DJIA) and S&P 500 fell by 6% each. Among its Asian peers, the Hang Seng and Shanghai Composite declined 9% and 2% respectively.
On the sectoral front, the top losers were BSE Metal and Oil & Gas as both of these sectoral indices fell by approximately 6% each.
BSE Consumer Durables was the only index that ended in the green, up 0.5%. Bajaj Electricals was the top gainer, up 3%, followed by C Mahendra and VIP Industries, up 2.6% each.