Sensex tanks 180 pts on rate hike fears; RIL, ICICI lead fall | business | Hindustan Times
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Sensex tanks 180 pts on rate hike fears; RIL, ICICI lead fall

business Updated: Apr 15, 2010 17:31 IST

PTI
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Stock market extended losses for the third day on Thursday with the benchmark Sensex plunging over 180 points, led by decline in Reliance Industries and ICICI Bank, as rising inflation raised concerns of an imminent interest rate hike by the Reserve Bank.

The Bombay Stock Exchange's 30-share index dropped 182.70 points or 1.03 per cent to settle at 17,639.26 points. During the day the index had extended its losses to 1.13 per cent as decline in global markets further weakened domestic sentiment.

Monthly inflation figures rose marginally to 9.9 per cent in March from 9.89 per cent in the previous month. The figure is much above the March-end estimates of 8.5 per cent as projected by the RBI.

Analysts said the concerns of rising inflation fuelled rate hike fears among investors who are booking profit after a continued rally for the ninth consecutive week.

Higher interest rates could temper demand for loans and could lead to reduced consumer spending that could in turn hit earnings of companies.

The 50-share Nifty Index of the National Stock Exchange declined by 0.93 per cent to 5,273.60 points.

"Investors booked profit after recent strong gains. The rise in the monthly inflation figure is hinting at a possible rate hike by the central bank RBI which will meet on April 20, Tuesday," CNI Research CMD Kishor Ostwal said.

Reliance Industries, which carries maximum weight on the index, declined 2.72 per cent and accounted for a third of the fall today. The scrip dragged the BSE oil&gas index, which was the biggest loser among the sectoral indices.

"RIL declined today as there were reports that the company could sell Treasury shares again," Ostwal said.

Financial sector led the decline in the market with ICICI Bank tanking 2.55 per cent and SBI (1.84 per cent).