Sensex falls 109 pts amid high inflation, weak global mkts
Erasing early gains, the Bombay Stock Exchange benchmark Sensex fell nearly 109 points today as funds sold on fears of hike in interest rate amid high inflation and weak global markets.business Updated: Aug 16, 2011 16:36 IST
Erasing early gains, the Bombay Stock Exchange benchmark Sensex fell nearly 109 points today as funds sold on fears of hike in interest rate amid high inflation and weak global markets.
The Sensex, which had climbed to 17,035.49 in the morning trade, gaining 187 points, fell back to end with a loss of 108.69 points at 16,730.94 on fears that RBI might hike key interest rates to curb inflation as it remained over 9 per cent for July.
Brokers said the nominal decline in inflation to 9.22 per cent in July, from a 9.44 per cent in June, was not enough to avert fears of further hike in interest rates. The broad-based National Stock Exchange index Nifty lost 37.15 points to 5,035.80, after climbing to 5,132.20 as stocks in metals, realty, bank and oil and gas sector fell.
Global markets were down after Germany showed stagnant growth numbers, knocking down European stocks and fuelling concerns about the health of the world economy. Asian stock markets, barring Tokyo, also closed lower. However, a rise in IT, Teck and FMCG stocks saved the market from any major fall.
The realty sector index suffered the most, after competition watchdog CCI imposed Rs 600 crore penalty on blue-chip DLF for abusing its dominant market position. Realty was followed by metals index, down 1.96 per cent and the banking index which fell 1.20 per cent. Reliance Industries, the most heaviest on the Sensex, fell by 0.24 per cent, besides a steep fall in front runners like L&T, Maruti Suzuki, HDFC Ltd., HDFC Bank, Tata Power and Tata Steel.