One step forward, two steps backward. That has been the continuing story on Dalal Street for nearly a month now. Major indices hurtled downhill on Friday amid thin volumes, highlighting the lack of confidence among participants.

The weakness in Asian markets only sought to undermine the sentiment further. After opening around 200 points below its previous close, the 30-share Sensex kept sliding through the session to close at 17,349.07, down 385.61 points, or 2.2%, over Thursday’s level. The 50-share Nifty dropped 81.05 points, or 1.6%, to close at 5,110.75.

Brokers said traders were keeping their commitments to the minimum, waiting for the Union Budget next week before firming up their views.

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Fears of an impending recession in the US are weighing down world markets and Indian shares have not been spared by the bearish mood around the world. However, the concerns could be exaggerated, felt DBS Cholamandalam AMC head-equities R Rajagopal. “Valuations, at this time, are very attractive,” he said. “India, to a large extent, will not be affected by the (expected) recession in the US. BRIC nations have shown resilience to recession in developed world,” he added.

Banking, IT and oil and gas shares were the worst performers on Friday, with frontline stocks like Bajaj Auto, HDFC Bank and Satyam Computers shedding over 4% each. Mid-cap and small-cap shares fared better compared with their large-cap counterparts.

Among key Asian markets, China was the worst performer, shedding over 3% on concerns that the earnings growth may fall short of investor expectations. Overall, the trend in Asia was bearish. WPI-based inflation rose to 4.35% for this week from 4.07% in the previous week, as per data released by the government on Friday. This was slightly higher than the market expectation of 4.11%.

Market breadth on BSE was negative, with nearly two stocks declining for every one that advanced. Surprisingly, even as the futures contracts for the current month are nearing expiry, traded turnover continues to be low.

Total turnover on both exchanges was around Rs 52,000 crore compared with around Rs 60,000 crore on Thursday. As per provisional data, FIIs net sold Rs 710 crore worth of shares while domestic institutional investors net bought

Rs 105 crore worth of shares on Friday.

Source….