Sensex tanks by another 388 points on heavy selling pressure
The BSE benchmark Sensex snapped its two-day winning rally and lost over 441 points as worries over rising inflation and high interest rates pulled it down to over 5-month low of 18,008.15, on heavy sell-offs in realty, FMCG, IT, Banking, Capital Goods and Auto segments.business Updated: Feb 05, 2011 16:57 IST
The BSE benchmark sensex tumbled by yet another 388 points due to persistent selling pressure from investors to settle at more-than five month low of 18,008.15, mainly led by FMCG, Realty, IT, Auto and Banking counters.
Fears of another round of hike in key interest rates in near future by the apex bank due to inflationary pressure and also rising global crude oil prices due to turmoil in Egypt, compelled operators and investors to book profits even at the current low levels.
According to market participants, the rise in interest rates might affect the bottomline of the companies in the next quarter earnings, resulting the interest rate sensitive stocks from realty, FMCG, banking and auto stocks suffered the most.
Statement by the Prime Minister Manmohan Singh that the economy has been on a high growth trajectory for the past few years, inflation posed a "serious threat to the growth momentum", also added fuel to the fire.
The Bombay Stock Exchange 30-share index touched a high of 18,542.20, but fell back sharply below 18K-mark to a low of 17,926.98 before concluding the week at 18,008.15, the level not seen since August 31, 2010 when it was ended at 17,971.12. It showed a loss of 999.38 points or 5.26 per cent during the last two weeks.
The NSE 50-share Nifty also tumbled by 116.40 points or 2.11% to finish below 5,400-mark at over 6-month low of 5,395.75. Previously, it had settled at 5,367.60 on July 30, 2010.