Equities edge lower weighed by inflation worries

Indian equities markets edged lower this week as traders were cautious in the wake of high inflation and an expected rate hike by the central bank. The fall could have been more, had it not been for an uptrend on the last two days of this trading week. The 30-scrip sensitive index (Sensex) of the
Bombay Stock Exchange (BSE) closed the week marginally lower at 18,266.1 points, down 0.33 % or 59.99 points, compared to its previous weekly close of 18,326.09 points.

At the National Stock Exchange, the 50-scrip S&P CNX Nifty too closed lower at 5,476.1 points, down 0.18 % compared to the previous Friday close of 5,486.35 points.

Broader market indices closed lower as well, with the BSE midcap index closing 0.39 % down and the BSE smallcap index losing 0.92 %.

Latest data for food inflation showed that the index had risen to 8.55 % for the week ended May 14, the highest level in four weeks.

Inflation based on wholesale prices also continued to reign high and was recorded at 8.66 % in April. The persistent high inflation could lead to another round of hike by the Reserve Bank of India.

On a weekly basis, among the top gainers on the 30-scrip Sensex were: Cipla, up 4 % at Rs.318.25; Tata Steel, up 3.7 % at Rs.585.35; Hero Honda, up 3.5 % at Rs.1,857.50 and Hindalco, up 3.5 % at Rs.197.50.

Major Sensex losers included: BHEL, down 6.5 % at Rs.1,936; Tata Motors, down 5.7 % at Rs.1,088.65; SBI, down 3.4 % at Rs.2,234.50, and TCS, down 2.4 % at Rs.1,141.45.

Asian stocks fell, with some indices registering losses on a weekly basis, not seen in the last two years. Concerns over China's growth slowing down and the European debt crisis were the major reasons for the fall.

The Japanese Nikkei average ended the week 0.89 % lower at 9,521.94 points, while the Shanghai composite index of the Chinese stock exchanges fell 5.2 % at 2,709.95 points.

The Hang Seng of the Hong Kong stock exchange closed 0.35 % lower at 23,118.07 points.

The European stock markets too ended the week in the red, although the losses were cut by a rally on Friday.

Among the European markets, the German DAX closed 1.42 % lower at 7,163.47 points while the French CAC 40 ended 1 % lower at 3,950.98 points. However, Britain's FTSE too moved down 0.16 % at 5,938.87 points.

US markets too closed in the red.

Wall Street closed the week on a weak note with the Dow Jones Industrial Average ending 0.56 % lower at 12,441.58 points, while the S&P 500 moved down 0.16 % at 1,331.1 points.

The technology-heavy Nasdaq ended 0.23 % down at 2,796.86 points.