Sensex declines 169 points as rate cut hope fades
The BSE benchmark Sensex today closed down by 169 points due to profit-booking amid RBI saying that "inflation was still high", fading hopes of a rate cut.business Updated: Jan 16, 2013 17:00 IST
The BSE benchmark Sensex on Wednesday closed down by 169 points due to profit-booking amid RBI saying that "inflation was still high", fading hopes of a rate cut.
The Sensex fell by 169.19 points, or 0.85% to settle at 19,817.63. The gauge had crossed the 20,000-mark after two years in Tuesday's trade. The index had rallied almost 324 points in last three sessions.
The broad-based National Stock Exchange index Nifty on Wednesday ended 54.75 points, 0.90%, lower at 6,001.85, after touching the day's low of 5,992.05.
Brokers said besides profit-booking by speculators as well as funds after the benchmark crossed 20,000-mark in yesterday's trade, the Reserve Bank saying that inflation was still high and there was no room for fiscal or monetary stimulus to boost growth in slowing economy mainly halted the ongoing rally.
"When growth is slowing down you can stimulate the economy either by monetary easing or by fiscal stimulus, but both monetary and fiscal side have no room for stimulus. So that is the big concern," RBI governor D Subbarao said while addressing IIM students last evening in Lucknow.
The RBI meets on January 29 to review its monetary policy.
Besides, a weakening trend in the Asian region and a lower opening in European markets also triggered selling by funds, they said.
While auto, metal, banking, realty, capital goods and IT sector indices remained in the negative zone, an upsurge in oil and gas sector as stocks of Reliance Industries gained 1.58% ahead of quarterly earnings cushioned the market to some extent.
The Auto sector index suffered the most by losing 2.40% to 11,335.09 as shares of Maruti Suzuki fell by 3.30%, Tata Motors by 3.24%, Mahindra and Mahindra by 2.95% and Bajaj Auto by 1.87% largely on disappointing sale numbers in December.
The banking index fell 1.66% to 14,514.96 as all the 14 constituent stocks, closing lower with losses up to 3.06%.
Shares of software services exporters which had been in the limelight in the past few sessions on the back of stronger-than-expected earnings succumbed to profit-booking.
IT giant Infosys lost 0.68% to Rs 2,771.05, while Wipro fell by 0.02% to Rs 420.05.
Overall, 24 stocks declined while six gained in 30-share Sensex.