Indices correct on higher oil prices and profit booking

05 December 2005

The markets looked tired on Friday's afternoon session when selling pressure pulled down the indices sharply and the weakness was expected to continue today as well. Global indicators were mixed as oil inched towards the $60 mark. US markets had closed on a mixed note on Friday. Asian markets were firm, though Hong Kong and Shanghai corrected today.

The rupee continued its decline against the dollar and slipped to a 15-month low today morning. A weakening rupee is not good news for FII's and was cited as one of the reasons for the October crash.

Even then, the indices managed to open with gains today morning. The Sensex notched up more than 50 points and once again went past the 9000 mark. Gains were short-lived though, and the indices lost steadily for the rest of the day.

After a brief attempt at recovery, the decline gathered momentum in the afternoon. The Sensex declined more than 100 points by late afternoon and slipped once again in the closing minutes.

Stocks of oil marketing companies turned weak as crude oil prices have gained over the last few days. BPCL was the biggest loser among index stocks, closing more than 4 per cent lower. HPCL lost close to 2.5 per cent while Indian Oil gave up over 3.5 per cent.