Benchmark indices continued to fall in the turbulent week ended December 16, with the Sensex and Nifty down more than 1% as some significant economies raised interest rates, foreign investors continued to sell, and India’s inflation rate fell.

The BSE Sensex shed 843.86 points or 1.35% to end at 61,337.81, and the Nifty50 shed 227.6 points or 1.23% to end at 18,269. Both indexes are down nearly 3% each in December so far.

Among sectors, the Nifty Media Index fell 2.2%, the Nifty FMCG Index fell 1.8%, the Nifty Real Estate Index fell 1.7%, and the Nifty Information Technology Index fell 1.6%. However, the nifty PSU bank index rose 0.8%.

For the week, the BSE small-cap index was flat, while the large-cap and mid-cap indexes fell more than 1%.

“Market volatility this week was defined by favourable inflation data, which was offset by aggressive decisions by major central banks worldwide. US CPI inflation eased to 7.1% in November, while India’s retail inflation eased sharply to 5.88%. RBI’s tolerance. However, the Fed’s hawkish tone surprised the market as investors expected a more dovish stance following the release of better-than-expected inflation data,” said Vinod Nair, head of research at Geojit Financial Services.

Following the Fed, the Bank of England (BOE) and the European Central Bank (ECB) raised interest rates by 50 basis points while maintaining a hawkish stance on inflation.

“The sell-off was broad-based, with IT stocks dragging the domestic market as global recession fears mount. The absence of a major trigger will drive the domestic market to follow its global peers in the week ahead,” Nair said.

During the week under review, foreign institutional investors (FII) sold shares worth Rs 1,832.91 crore, while domestic institutional investors (DII) bought shares worth Rs 3,462.22 crore. As of December, FIIs sold shares worth Rs 7,490.05 crore, and DII bought shares worth Rs 10,551.62 crore.

The BSE small-cap index closed flat. UCO Bank, National Fertilizers, Andrew Yule and Company, Orient Green Power Company, Themis Medicare, Punjab & Sind Bank, NAVA, Jai Balaji Industries, Vardhman Special Steels, Suryoday Small Finance Bank, EPL, Ugar Sugar Works, Suzlon Energy added 15 – 54%.

However, Cerebra Integrated Technologies, Fineotex Chemical, GMM Pfaudler, Sadbhav Engineering, Mirza International, SP Apparels, Sonata Software and Optiemus Infracom fell 10-53%.