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Sensex hits 29-month high before drop

After rising to a 29-month high level, the Bombay Stock Exchange benchmark Sensex on Wednesday closed lower by 48 points on emergence of profit-selling triggered by a rise in inflation and a fall in European markets.

business Updated: Jul 15, 2010 00:33 IST

After rising to a 29-month high level, the Bombay Stock Exchange benchmark Sensex on Wednesday closed lower by 48 points on emergence of profit-selling triggered by a rise in inflation and a fall in European markets.

The Sensex, which gained over 515 points in the last four trading sessions, declined by 47.74 points to end at 17,938.16. The benchmark index touched an intra-day high of 18,167.22 points, a level last seen in February, 2008.

In the 30-BSE index components, 22 stocks declined while eight ended with gains. Information technologies, tech, metals and refinery stocks were the major losers.

Reliance Industries dropped by Rs 5.70 to Rs 1,069.05, while Infosys Technologies fell by Rs 53 to Rs 2,742.30. These two stocks carry nearly 23 per cent weightage on the Sensex.

Bucking the general weak trend, however, L&T and State Bank of India stocks registered a steep rise, cushioning the Sensex's fall. L&T gained Rs 45.75 to Rs 1,882.90, while SBI rose by Rs 36.30 to Rs 2,464.35.

Marketmen said fag-end profit selling at existing higher levels was sparked by concerns over the acceleration in inflation in June, which led to speculation that there was pressure on the central bank to raise interest rates for a second time this month.

After a better start in tandem with the firming trend in the Asian region, following overnight gains in the US market on upbeat results for Intel Corp, the Sensex lost ground following a lower opening in Europe this afternoon.

The broad-based National Stock Exchange index Nifty fell by 14.50 points to 5,386.15, after touching the day's high of 5,453.45 points.