High inflation knocks down Sensex by 489 points
Sensex declined 489.43 points at 15,343.12 on aggressive selling by funds in stocks of capital goods, realty, power, metal, auto, refiners and banking sectors.Updated: Apr 04, 2008 17:03 IST
The markets ended down on Friday with the Bombay Stock Exchange benchmark Sensex dropping nearly 489 points as the investor sentiments were dampened by fears of a hike in interest rates, following ballooning of inflation.
The three-day long upward march was snapped as the Sensex declined 489.43 points at 15,343.12 on aggressive selling by funds in stocks of capital goods, realty, power, metal, auto, refiners and banking sectors.
The key-index touched the day's high of 15,896.09 and a low of 15,303.04 points.
The wide-based National Stock Exchange index Nifty dropped by 124.60 points at 4647.00, after touching a high of 4791.70 and a low of 4632.70 points.
HDFC led the drop among lenders on speculation of higher interest costs would stem loan demand. Bharat Heavy Electricals, the nation's biggest power equipment maker, slumped to a seven-month low after the company said profit growth may slow on higher material costs.
Record raw-material prices have jacked up inflation, prompting the government to impose price controls and curb exports of essential commodities.
Capital goods sector index suffered the most by dropping 594.38 points at 12,620.35 followed by oil and gas by 249.24 points at 10,282.64. Bank index by 230.66 points at 7589.96, realty index by 176.36 points at 7346.96, metal index by 148.41 at 13,440.35 and PSU index by 171.73 points at 7175.05.
As the selling pressure spread over a wide-front, smallcap index lost 125.30 points at 7715.99 and midcap index by 124.38 points at 6262.95.