Sensex opened on a positive note with a gain of 176 points at 16,591.However, the enthusiasm slipped on news of political differences at the Centre over raising of domestic retail fuel prices and weak opening in European markets. Sensex pared the initial gains and fell to 16,063.18, down by 2.15 per cent on Monday.
Improved automobile sales for the May gave the much needed boost to the BSE Auto index. Major auto stocks came into the buyers radar and made appreciable gains.
Fears of an imminent interest rate hike by the central bank as inflation continues to rise to record levels affected the sentiment for the banking stocks. While the Sensex witnessed a fall of 1.75 per cent in a week's time, the Bankex tumbled by 6.11 per cent.
Metals and mining stocks continued to weaken for two consecutive days on profit booking largely by institutional investors.
However, steel stocks at Tuesday's close managed to pare down the losses compared with that on Monday. Aluminium and zinc stocks closed lower.
On Wednesday, the Government announced a substantial hike in fuel prices after a protracted delay, keeping investors away.
Markets were in jitters, expecting this measure may lead to inflationary pressures on the economy, thereby affecting corporate profitability. Turbulence in the market pulled down the Sensex by 448 to close at 15,480 ; the broader S&P CNX Nifty fell 2.76 per cent, to end at 4,585.60.
Oil marketing stocks feel the heat on Wednesday as investors liquidated their long positions in these stocks even after the announcement of the oil price hike. The BSE Oil & Gas index shed 353 points or 3.39 per cent from the previous day's close, while the Sensex was down 2.81 per cent.
As soon as the fuel price hike announcement came, the share prices of oil marketing firms surged more than 5 per cent. They witnessed the highest rise. At their intra-day highs, BPCL was trading at Rs 371, IOC at Rs 452 and HPCL at Rs 256.
On Thursday,the Sensex, gained 254.93 points, or 1.6 per cent, to end at 15,769.72. It traded between 15,314.02 and 15,814.80 during the session.
However, oil marketers fell sharply on concerns that the retail fuel price hike may not be enough to cover their revenue losses, with the companies having to cough up Rs 20,000 crore in the current fiscal compared with Rs 16,300 crore losses last year.
Hindustan Petroleum fell 6.3 per cent to Rs 226.30, Bharat Petroleum shed 7 per cent to Rs 301.35 and Indian Oil closed 6.3 per cent down at Rs 391.90.
Reliance Industries fell 2.6 per cent to Rs 2, 247.65 as crude oil prices fell to a three-week low of around $122 a barrel on the New York Mercantile Exchange Thursday.
On Fridy,the Sensex, after a strong opening at 15914.41,pared the early gains and closed at 15,572.18,lower by 197.54 points. Selling pressure emerged in the fag end of trading, particularly in metal, realty and banking sectors. In a choppy trade, the key index touched the day's low of 15,526.50 and a high of 15,970.70 points. The markets continue to show signs of weakness and the Sensex cumulatively lost 843.39 points to finish the week at 15,572.18.