Sensex fails to carry last week gains, falls 633 pts

Mumbai: The BSE benchmark Sensex failed to maintain last week`s gains by slipping over 633 points during the week on fresh selling pressure on concerns over Government`s inability to continue with policy reforms after it suspended plans to allow foreign direct investment (FDI) in multi-brand retail sector.

Concerns over outcome of European Union summit also spooked sentiments. The 30-share Sensex fell 633.37 points, or 3.76 per cent, to 16,213.46 from its last weekend`s level. The 50-share S&P CNX Nifty also tumbled by 183.45 points, or 3.63 per cent, to 4,866.70.

The BSE Mid-Cap index fell 2.47 per cent, while the BSE Small-Cap index dropped 2.21 per cent. Facing a harsh political reaction that paralysed Parliament, the Congress-led UPA Government put on hold plans to allow foreign multi-brand retailers like Wal-Mart to open stores in India.

Comments of Finance Minister Pranab Mukherjee on gloomy GDP growth also affected the market sentiment. He said surging food and fuel prices amid weak global economic growth are adversely impacting GDP growth of the country.

The Centre also said it will not be easy to restrict the fiscal deficit to 4.6 per cent of GDP in 2011-12 due to uncertainty on the disinvestment front and a likely increase in subsidies, but maintained that the slippage will be minimal.