Sensex falls 51 pts on earnings, interest rate concerns
The BSE Sensex today fell for the third straight day today, down 51 points at 18,086, on sustained selling by funds amid lower-than-expected corporate earnings, high interest rates and rising fuel prices.business Updated: May 18, 2011 17:31 IST
The BSE Sensex on Wednesday fell for the third straight day today, down 51 points at 18,086, on sustained selling by funds amid lower-than-expected corporate earnings, high interest rates and rising fuel prices.
The 30-share Bombay Stock Exchange index, Sensex, which lost 394 points in the last two trading sessions, fell further by 51.15 points to close at 18,086.20, after swinging between gains and losses.
The gauge touched the day's low of 18,020.79, after rising to 18,218.20. It has lost nearly 12.5% this year, mostly on concerns that rising borrowing costs against the backdrop high inflation, will hurt corporate earnings which have already thrown up some shocks.
Similarly, the broad-based National Stock Exchange index Nifty fell 18.35 points to 5,420.60, after dipping to 5,401.25.
The Reserve Bank of India had raised key rates for the ninth time this year on May 3 by half a percentage point to 7.25%, pushing up overall lending rates.
The most-heaviest weighed on the index, Reliance Industries, fell 2.02% to Rs 901.80, in view of reports of decline in gas output from its blocks in KG basin. The stock has shed 13% this year.
The Sensex-linked biggest state-owned lender State Bank of India fell further by 2.40% to Rs 2,355.70, after it posted 99% dip in Q4 profits yesterday on higher provisioning for bad loans, pension and taxes.
Major foreign funds led by Morgan Stanley cut their target price on the bank after the results.
The auto sector stocks suffered losses as investors expected higher fuel prices and rising borrowing costs to slow down demand in the world's second-fastest growing major economy. State-run refiners had raised petrol prices by about 8.6%, a record increase.
Tata Motors dropped by 3.36% to Rs 1,149.60, Mahindra and Mahindra by 0.47% to Rs 669.30 and Bajaj Auto by 1.65% to Rs 1,286.65.
The oil and gas sector index suffered the most by losing 1.88% to 9,185.86. followed by Healthcare index by 1.40% to 6,108.96.
The auto sector index lost 0.98% to 8,970.16, realty index by 0.92% to 2,120.45 and Bank index by 0.69% to 12,079.45.