Oil price worries spoil Sensex record run

The week started on a positive note with the BSE Sensex rising 180 points in the first four trading sessions. However, the last day of the week proved to be a spoiler.

Heavy profit-booking and concerns over high oil prices on Friday (June 13) made sure that the index closed the week at 25,228.17 , down 168 points from 25,396.46 on June 6. It had touched a high of 25,583.69 on June 10.

Among sector indices, the BSE Oil & Gas and Realty indices remained top losers by falling over 5% to 11,361.96 and 1,994.75, respectively, during the week. The BSE IT index was the top gainer; it rose 5.89% and closed the week at 8,895.53.

In the BSE 100 index, Housing Development Finance Corporation, Coal India, The Federal Bank, UPL Ltd, Shriram Transport Finance Corporation, Ultratech Cement, Axis Bank, Larsen & Toubro, ACC, Ambuja Cements and Dabur India touched all-time highs.

Dipen Shah, head, private client group research, Kotak Securities, says, "Markets ended the week with a big fall on Friday. Crude oil price concerns caused by tensions in Iraq marred sentiment. Several stocks, which have had a heady run up over the past few weeks, fell sharply on profit-booking."

S Ranganathan, head of research, LKP Securities, seconds Shah. "Tensions in Iraq and heavy selling on June 13 dragged down the market." On June 13, the Sensex fell 348.04 points.

Due to soaring crude oil prices, Hindustan Petroleum fell 13.8% during the week to Rs 558.25. It was followed by Indian Oil Corporation (down 10.71% to Rs 333.20) and Bharat Petroleum Corporation (9.46% to Rs 568.25).

Rakesh Goyal, senior vice-president, Bonanza Portfolio, says, "Rising tensions in Iraq are a major reason for the sudden rise in crude oil prices." On June 13, crude oil hit a nine-month high of $114 per barrel.

According to the NSDL website, foreign institutional investors, or FIIs, remained net buyers; they invested Rs 7223.60 crore during the week (June 9-13).

Ranganathan of LKP Securities says, "Equity markets are likely to remain choppy next week because of the Iraq issue. Inflows from FIIs are likely to continue as they are bullish on emerging markets, especially India, compared to other BRICS nations."