Sensex falls 151 pts on interest rate concerns
Erasing initial gains, the BSE benchmark Sensex fell 151 points on selling by funds in interest-rate linked stocks amid fears that the Reserve Bank may hike its lending rate further to tame inflation.business Updated: Oct 21, 2011 17:19 IST
Erasing initial gains, the BSE benchmark Sensex fell 151 points on selling by funds in interest-rate linked stocks amid fears that the Reserve Bank may hike its lending rate further to tame inflation.
The BSE 30-share barometer, which had lost 148 points yesterday, fell further by 151.25 points or 0.89% to 16,785.64, wiping off early gains.
The broad-based National Stock Exchange index Nifty also fell 41.95 points or 0.82% to 5,049.95, after touching the day's high of 5,120.75
Realty and metal stocks suffered major losses.
Brokers said trading sentiment was subdued ahead of RBI's meeting on monetary policy review next week. It has raised lending rates 12 times since March, 2010 to tame the rate of price rise.
Still, the food inflation was up at 10.60% for the week ended October 8, from 9.32 % in the previous week. The overall inflation was 9.72 % in September, much above RBI's comfort level of around 5%.
Brokers said investors also squared their positions ahead of the expiry of the monthly derivatives contact.
Globally, the trend was mixed in the Asian region and European markets opened higher.
The realty sector index suffered the most by losing 1.99% to 1,772.54.
The banking index fell 0.67% to 11,094.31 and auto index lost 0.20% to 8,848.17.
The fall in the market was led by heavyweights Reliance Industries, Infosys, Bharti Airtel, Tata Motors, Tata Steel, Larsen and Toubro, HDFC Ltd. and ICICI Bank. Of the 30 scrips in the index, 23 closed with losses.