Sensex dips 55 pts on rate hike fears, weak global cues
The BSE benchmark Sensex today fell by 55 points as investors feared another hike in interest rates when RBI reviews the inflation situation next week amid a weak global trend.business Updated: Jul 18, 2011 17:03 IST
The BSE benchmark Sensex on Monday fell by 55 points as investors feared another hike in interest rates when RBI reviews the inflation situation next week amid a weak global trend.
The Bombay Stock Exchange's 30-share index, which shed 56 points in the previous session, on Monday lost another 54.88 points at 18,507.04, on concerns that high inflation in June might force the Reserve Bank of India to hike borrowing costs.
Broad-based National Stock Exchange index Nifty fell by 14.05 points to 5,567.05.
Brokers said weakness in Asia and lower opening in Europe amid concern over the fate of political negotiations on raising US debt by August to avoid a default by the $ 14 trillion-economy made investors cautious.
Besides, failure of eight European banks in clearing the European Banking Authority’s stress tests spiked the market.
The bearish sentiment abroad infected the software companies' stocks at home as they get over 50 % of their revenues from the US and European market exports.
Infosys, the second-heaviest scrip on Sensex fell 0.60 % to Rs 2,714.05, while the country's largest IT services exporter lost 1.97 % at Rs 1,125.40 a piece.
Market sentiment was also jittery ahead of quarter earnings by some leading companies on expectations that they might fall behind the market expectations. Three out of the four Sensex companies' first quarter earnings have fallen short of analyst estimates as rising interest costs crimped profits.
Auto, IT, Healthcare and Teck stocks traded low while gains in Realty, Consumer Durable, Metal and Power sectors saved the market from any major fall.