Sensex sheds 62 pts over rate hike concerns
The BSE benchmark Sensex today closed over 62 points down amid concerns that the central bank is likely to hike short-term interest rates at its forthcoming monetary policy review, a step that might hamper economic growth.business Updated: Jan 04, 2011 17:44 IST
The BSE benchmark Sensex on Tuesday closed over 62 points down amid concerns that the central bank is likely to hike short-term interest rates at its forthcoming monetary policy review, a step that might hamper economic growth.
The 30-share index of the Bombay Stock Exchange (BSE) fell by 62.33 points to 20,498.72 as interest rate-sensitive banking, realty, consumer durable and auto stocks witnessed profit-booking by investors.
The Sensex had opened on a firm note and climbed to an intra-day high of 20,651.21 points. In the past four sessions, the barometer gained almost 535 points.
Similarly, the broad-based National Stock Exchange (NSE) Nifty index rolled back to close with a loss of 11.25 points at 6,146.35 after rising to an intra-day high of 6,181.05.
Market analysts said that the major concerns that led to the decline in the stock market was the apprehension that the Reserve Bank of India is likely to hike interest rates to curb rising inflation.
Banking and other interest-sensitive stocks suffered the most. The banking sector index fell by 2.48% to 13,121.12, led by the country's biggest lender, State Bank of India (SBI), which tanked by 3.09% to Rs 2,733.60.
In addition, the realty sector index lost 1.12% to 2,838.54, while the consumer durables index shed 0.59% to 6,416.70.
The auto sector index also declined by 0.55% to 10,162.24 over concerns that the interest rate hike might deter prospective buyers, while the metal index shed 0.38% to 17,890.55.
With selling pressure spread across sectors, the midcap sector index lost 0.26% to 7,853.03 and the smallcap index fell by 0.04% to 9,841.17.
However, a rise in Reliance Industries by 2.12% to Rs 1,076.55 and Infosys Technologies by 0.44% to Rs 3,468 on the BSE, helped avert a major fall.