Sensex ease 5-wk streak, drops 307 pts
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The BSE benchmark Sensex snapped a five-week winning spree by slipping 307 points due to profit-booking at the current level on expectations of subdued corporate earnings following disappointing quarterly results from IT major Infosys.
Traders said worries over monsoon fuelled speculation about scarcity of foodgrains and price rise. Brokerage Emkay Global estimated that a 10 per cent deficient monsoon will imply 3.7 per cent contraction in foodgrain production.
Metal stocks displayed weakness as prices of industrial commodities fell in global markets.
The 30-share Sensex resumed lower at 17,449.93 and hovered in a range of 17,631.19 and 17,181.17 before ending the week at 17,213.70, a net loss 307.42 of points, or 1.75 per cent.
The key index had firmed up by a healthy 1,555.96 points, or 9.75 per cent, in the last five weeks.
The Sensex had soared 226 points on Tuesday, riding on buying in capital goods, FMCG, auto and banking shares to close at a four-month high of 17,618.35 amid strong global cues after eurozone Finance Ministers agreed on a deal to nurse the ailing Spanish banks back to health.
The NSE 50-share Nifty also dropped by 89.70 points, or 1.69 per cent, to finish the week at 5,227.25. It had also gained by 9.82 per cent in the last five weeks.
The Sensex on Thursday suffered the worst single-day fall of 257 points in nearly seven weeks after Infosys' higher-than-expected cut in revenue outlook on the back of insipid earnings soured sentiment.
Meanwhile, industrial production growth rate slowed to 2.4 per cent in May, 2012, due to contraction in capital goods and mining output coupled with poor show by manufacturing sector.
Traders said FIIs are in a wait-and-watch mode after the government on Friday set up a committee to prepare fresh norms on the controversial GAAR tax provision to bring greater clarity and prepare a roadmap by September 30 for its implementation.
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