The Sensex and the Nifty fell to fresh 19-month lows, as persistent selling in banking stocks, continued to weigh on markets.
The Sensex closed the week at 24,454 points - a level not seen since June 4, 2014. In the process the benchmark indices lost another 2 per cent in trade this week, making it one of the worst starts to the new year in recent times.
Stocks like Canara Bank, Bank of India, Punjab National Bank, State Bank of India, ICICI Bank, Syndicate Bank, Axis Bank, Bank of Baroda, Bank of India, Union Bank and most other banking stocks touched 52-week lows. Larsen and Toubro was another blue chip stocks that was pounded during the week.
Shares in Hindustan Unilever also fell sharply, after the company reported a lower than expected net profit. Volume growth and competition from the likes of Patanjali continued to weigh on the stock.
Reliance Industries and Infosys were the only stocks that managed to hold the markets. The sharp rally in the stock price of Infosys lent some support to the markets, which would have come crashing down even further.
Infosys and Reliance are heavyweight stocks in the index.
The bigger worry for the markets was the carnage in small and mid cap stocks. In fact, the small cap index lost as much as 9 per cent this week, as investors were caught on the wrong foot.
As we head into the next week, markets are likely to fall further. No amount of buying from domestic funds seems to be helping the market, as foreign funds are heavily selling into Indian stocks.
Crude oil has come crashing down below the $30 mark and US markets on Friday have fallen sharply. This may lead to a fall in Indian markets on Monday and there may be fresh selling, if results to be declared by companies are not as per expectations.
Closely watched would be results of the banking sector, especially after the carnage in banking stocks. It's highly possible that the Sensex may dip below the 24,000 points mark next week.