The benchmark Sensex of the Bombay Stock Exchange on Friday plunged to a 13-month low, losing 555 points intra-day and ending below 20,000 on frenetic selling by investors who feared an imminent hike in interest rates to tame inflation. Sensex tumbles
What led to the fall?
Rising inflationary pressures and its impact on interest rates triggered a fall in the large-caps on Friday. There are concerns over pressure on earnings growth in case input cost and interest rate pressures rise.
What is the outlook for the year?
Broad growth fundamentals are in place but with concerns around interest rates and inflation are running high, market experts see a volatile market in 2011 with modest optimism. Market players do not see very strong returns this year.
What you should do?
As equity investment is for the long term, take a dip in the market as an opportunity for investment. When the market bounces, it will generate handsome returns.