Sensex fails to regain 20k level; declines 47 pts
BSE benchmark Sensex's struggle to regain the crucial 20,000-mark tripped today as it declined 47 points on funds selling in blue-chips, led by banking sector on concerns that interest rate hike may hit profitability.business Updated: Dec 07, 2010 16:57 IST
BSE benchmark Sensex's struggle to regain the crucial 20,000-mark tripped today as it declined 47 points on funds selling in blue-chips, led by banking sector on concerns that interest rate hike may hit profitability.
Realty stocks too witnessed a steep fall.
The Bombay Stock Exchange benchmark Sensex, which had touched the 20,000 mark at the outset, fell back to close with a loss of 46.67 points to 19,934.64 as investors felt that raising deposit rates without a commensurate increase in lending rates might hamper banks' earnings growth.
A steep fall in banking and realty sector remained a hurdle to every rise in the market sentiment. The firming Asian trend and higher opening in European stocks this afternoon failed to push up the benchmark and settle over the crucial 20,000 level.
The banking sector index suffered the most by losing 2.86% to 13,339.43 as State Bank of India, ICICI Bank, HDFC Bank and HDFC Ltd fell sharply. These four are among the 10 best performing stocks on the Sensex.
Trading sentiment was further hurt as foreign funds reduced their purchases by 0.1 per cent in the week ended November 26, the first drop since May, on global economic concerns as Europe struggled to contain its debt crisis.
State Bank of India, the country's biggest lender, dropped to a one-week low by dropping 2.96% to Rs2,865.40, extending previous day's loss of 3.9%.
Private lender ICICI Bank, the second-biggest, lost 3.50% to Rs 1,110.30, extending Monday's 2.6%
drop. HDFC Bank, the third-largest, fell 1.10% to Rs 2,359.20, HDFC Ltd. by 0.41% to Rs 702.05. Axis Bank dropped 4.18% to Rs 1,324.80, its steepest decline since July 2009.
The realty sector index was second worst performer, declining 0.93% to 2,913.07 as segment majors DLF Ltd, Akruti City, DB Realty, Sobha Developers and Indiabulls Real Estate fell on concerns that the current hike in deposit rates would reduce liquidity and effect home sales.
However, the two most-heaviest with their 23% weightage on the Sensex, Reliance Industries and Infosys Technologies rose smartly and cushioned the falling trend.
Reliance Ind rose by Rs 10.75 to Rs 1,030.50 and Infosys by Rs 22.30 to 3,167.75.
In the 30-BSE index components, 19 stocks closed with gains while 11 scrips ended lower.
As the investors interest shifted to fundamentally strong front-runner stocks, smallcap index lost 1.70% to 9,604.63 and midcap index by 1.04% to 7,772.23.
First Published: Dec 07, 2010 10:32 IST