Saturday 31 December 2011

BSE Sensex Logs 1st Annual Fall in 3 years; Outlook Bleak


The BSE Sensex closed 0.6 percent lower on Friday and posted its first annual fall in three years as a combination of near double-digit inflation, high interest rates, slowing domestic growth and policy inaction turned off investors already shaken by global headwinds.
The benchmark shed 24.6 percent in 2011 to be the world's worst-performing major equity market and the outlook for next year remains bleak, although cheaper valuations and a possible cooling off in inflation that would allow the central bank to reverse its monetary tightening cycle raise some hopes.
Foreign fund inflows, a major driver of Indian stocks, dried up in the dismal year with net outflows of about $380 million as of Wednesday, a far cry from record inflows of more than $29 billion in 2010 that had powered a 17 percent rise in the benchmark index, following an 81 percent surge in 2009.



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