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Sensex down 61 pts despite fastest GDP growth in 3 years

business Updated: Aug 31, 2010 17:38 IST

The BSE benchmark Sensex today ended 61 points lower, led by energy giant RIL, on weak global cues, despite the Indian economy growing at the fastest pace in nearly three years.

Markets opened on a weak note, taking negative cues from US markets and losses suffered by the Asian equities. Even impressive GDP data failed to lift the investor sentiment and the Sensex closed the day lower by 60.99 points, or 0.34 per cent, at 17,971.12.

At one point of time, the Bombay Stock Exchange's 30-share barometer sank by 212.12 points to hit a low of 17,819.99. However, fag-end buying in auto and FMCG stocks and short-covering helped the market to pare most of losses suffered in early trade.

On a monthly basis, the Sensex has recorded a gain of 0.6 per cent in August. This is the third monthly gain in a row. In a choppy session, the National Stock Exchange's Nifty Index finished at 5,402.40, down by 0.24 per cent.

"While markets corrected a bit after the announcement of the numbers, they were weighed down more by the concerns of weakness in the global indices. The valuations at current juncture are comfortable, which will ward-off any risk of any major selling," Angel Broking CMD Dinesh Thakkar said.

The global sentiment was weak as slower-than-estimated growth in personal incomes in the US heightened concerns that economic recovery may slow. Extending the losses for the seventh consecutive session, index heavyweight Reliance Industries Ltd plunged 3 per cent to end at Rs 918.85, amid the energy giant's entry into the hospitality sector by buying a stake in EIH Ltd.

"The EIH deal failed to enthuse the investors and selling pressure is mounting on RIL," Geojit BNP Paribas Research Head Alex Mathews said, adding that the stock is unlikely to recover in the coming days. Anil Ambani-led RCom also saw selling pressure and dropped 3.68 per cent, the most in the Sensex pack.

Other major losers include Jaiprakash Associates (down 3.5 per cent), Jindal Steel (down 2.11 per cent), DLF (down 1.82 per cent) and BHEL (down 1.38 per cent). Some momentum brought in by auto, FMCG stocks was offset by the steep fall in consumer durables, oil and realty scrips.

In another sign that growth in India remains on a strong footing, the economy expanded by 8.8 per cent during the April-June period, in line with the market consensus.