Interest rate hike fear takes Sensex to seven-week low at 19,224 | business | Hindustan Times
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Interest rate hike fear takes Sensex to seven-week low at 19,224

business Updated: Jan 11, 2011 02:23 IST
HT Correspondent
HT Correspondent
Hindustan Times
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Under pressure from global markets and high domestic inflation rate that could push up interest rates, the Sensex fell by over 450 points for the second consecutive trading day, taking the total fall in two trading sessions to 960 points or 4.8%. The index closed at a seven-week low of 19,224.

With this, the past five trading sessions have taken the Sensex down 1,337 points (6.6%). The Nifty fell 141 points (2.4%) to close at 5,763 as foreign institutional investors pulled out Rs 964 crore from the Indian market.

With the rate hike threat and its overall impact on the economy looming, even heavyweights such as Reliance Industries, ICICI Bank and Larsen and Toubro fell by over 3%, dragging the broader market with them. Among sectors, the biggest falls came in real estate (down 3.6%), capital goods (3.5%) and consumer durables (3.3%).

"Inflation is the biggest danger now, triggering fear of further rate hikes by RBI,” said Amar Ambani, head of research at the brokerage India Infoline Financial Services. “Slowdown in overseas inflows coupled with the government’s inability to address key concerns are taking a toll on investor confidence.”