Sensex down by 205 pts despite fag-end recovery
Despite hectic short-coverings on the last day of the week ahead of the expiry of May contract coupled with strong results from Larsen and Toubro, the benchmark Sensex fell by 205 points to finish at 18,326.09.business Updated: May 21, 2011 14:05 IST
Despite hectic short-coverings on the last day of the week ahead of the expiry of May contract coupled with strong results from Larsen and Toubro, the benchmark Sensex fell by 205 points to finish at 18,326.09.
Sustained selling by foreign funds and fears of high interest rates which may affect corporate profitability mainly affected the market sentiments.
Steep hike in petrol prices and fears of rise in diesel prices next week are expected to stoke up the inflation further which weighed on the market sentiment, resulting the benchmark Sensex to fell to an 8-week low at 18,020.79.
Higher headline inflation, although it softened slightly in the month of April, and sluggish global trends too kept the market under pressure.
Gloomy earnings by the banking major State Bank of India (SBI) also led to the fall in the value of share prices.
The country's largest lender SBI's net profit tumbled to Rs 20.88 crore for the Q4 ended March 11, against Rs 1,866.60 crore in the same quarter last fiscal due to higher provision for bad loans and operating expenses.
Sensex recovered by 184 points on the last day of the week following strong results from Larsen & Toubro.
It resumed lower at 18,492.68 and dropped further to 18,020.79 before settling the week at 18,326.09, showing at net loss of 205.19 points or 1.11% from its last weekend's level.
The NSE 50-share Nifty also dropped by 58.40 points or 1.05% to end at 5,486.35.
Heavy sell-off from Foreign institutional investors (FII's) to the tune of Rs 7,612.70 crore during the current month till May 19 also affected the market sentiments.
Share of Larsen and Toubro (L&T) today rose by 8.05% as company reported a 17.25% growth in standalone net profit to Rs 1,686.21 crore for the quarter ended March 31, 2011.
Giving its outlook for the current year, the company said completion of several expansion projects is underway and it will strengthen the company's position of prominence in various business verticals.
Food inflation in the country slipped further to 7.47% for the week ended May 7, on the back of cheaper pulses, vegetables and wheat.
Among the major indices, the BSE-PSU fell by 4.74% followed by the BSE-Oil & Gas (4.62%), the BSE-Realty (4.18%), the Bankex (3.43%) and BSE-Metal (1.84%).
However, the BSE-Capital Goods shot up by 3.99% and BSE-Consumer Durable gained 1.04%.
Small-cap and Mid-cap indices also finished lower by 2.19% and 2.12%, respectively.