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Weak global trends drag Sensex down by 98 points

business Updated: Aug 24, 2010 18:08 IST

PTI
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The Bombay Stock Exchange benchmark Sensex on Tuesday ended lower by nearly 98 points, led by Sterlite Industries, with investors preferring to stay away from risky assets amid weak global cues.

In tandem with weak world markets, the 30-share barometer of the BSE closed lower by 97.76 points, or 0.53 per cent, at 18,311.59.

The National Stock Exchange's 50-share Nifty index too shed 0.69 per cent to finish at 5,505.10 points.

Analysts said that worries of global economic recovery is weighing on market sentiment and a minor correction in coming
days cannot be ruled out. The markets are also choppy in view of the expiry of the derivative contracts due this week.

"The pace of economic recovery is slower than anticipated and those concerns are weighing on investor sentiment," Angel Broking's Vice-President (Research) Sarabjit Kour Nangra said.

Mining major Sterlite Industries, a Vedanta Group entity, plunged 4 per cent, after the government rejected environment
clearance to group's USD 1.7 billion bauxite mining project in Orissa.

Sterlite was the worst hit stock in the Sensex pack and was followed by steel major Hindalco, which also sank about 4
per cent. Other metal stocks too were under selling pressure, with Tata Steel and Jindal Steel each falling by 1.4 per cent.

"Metal sector is demand-driven and any gloomy outlook for global markets counts on investor sentiment," Nagra added.

Reliance Industries, which carries maximum weight in the Sensex, declined for another day closing lower by 0.35 per
cent at Rs 973.

RIL stock is down over 7.2 per cent against the Sensex that is up 1.6 per cent since the declaration of the company's
June quarter results on July 27.

"Although the company lacks near-term triggers, yet we positively view its recent acquisition of shale gas assets,
which are long-term in nature and would mark RIL's entry into the US gas market," domestic brokerage Sharekhan said.

Other major losers include Infosys that declined by about 1 per cent, ICICI Bank by 0.93 per cent and L&T by 0.63 per
cent.

Real estate developer DLF lost 2.60 per cent, dragging the BSE realty index by 2.62 per cent, the most among the 13
sectoral indices. Barring consumer durables, FMCG and pharma, all other sectoral indices in ended in the red.

Consumer durables stocks extended yesterday's gain after the government announced sops worth Rs 1,052 crore for textile and export companies, among others.

Among the BSE-30 pack, 23 stocks ended with loss, while 7 managed to settle in the green.