Sensex sheds 489 points

MUMBAI — Inflation data showing a surge to a three-year high marred the trading sentiments yesterday. Inflation based on the wholesale price index touched a 3-year high at 7 per cent for the week ended March 22 as against 6.68 per cent in the week before.

By Our Correspondent

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Published: Sat 5 Apr 2008, 9:25 AM

Last updated: Sun 5 Apr 2015, 11:35 AM

Banking stocks fell after concerns of possible Reserve Bank of India intervention to rein in inflation. Capital goods and power stocks declined. Bharat Heavy Electricals (Bhel) and HDFC were major losers whereas Ranbaxy Laboratories and Tata Steel were top gainers from the Sensex pack. The market breadth was weak. European markets were in green.

The 30-share BSE Sensitive Index (Sensex) opened with a positive gap of 63 points at 15,896, but soon slipped into red owing to nervousness in the markets. The day's low was 15,303 — down 593 points from the day's open. The Sensex finally ended with a significant loss of 489 points at 15,343. The NSE Nifty dropped 125 points to close at 4,647. Nifty April 2008 futures were at 4666.10, at a premium of 19.1 points as compared to spot closing of 4647.

BSE Clocked a turnover of Rs49.66 billion from Rs49.86 billion on Thursday. The NSE's futures & options segment turnover was Rs337.23 billion from Rs325.13 billion on Thursday. The market breadth was fairly negative — out of 2,697 stocks traded, 1,823 declined, 808 advanced while 66 remained unchanged.

Barring 2 stocks, all the Sensex members were in the red. BHEL and HDFC tumbled nearly 7 per cent each to Rs1,634 and Rs2,278, respectively. Mahindra & Mahindra slumped 6 per cent to Rs605. Larsen & Toubro slumped 5.7 per cent to Rs2,686. Jaiprakash Associates plunged over 5 per cent to Rs221. Bharti Airtel and Wipro dropped 4.5 per cent each to Rs784 and Rs416, respectively. ITC shed 3.5 per cent at Rs201. ICICI Bank, Maruti and Reliance slipped 3 per cent each to Rs764, Rs764 and Rs2,322, respectively. Cipla dropped 2.7 per cent to Rs214.

HDFC Bank, DLF, Reliance Communications and Infosys declined around 2.5 per cent each to Rs1,292, Rs608, Rs500 and Rs1,483, respectively. Tata Motors and NTPC were down 2.3 per cent each at Rs614 and Rs190, respectively. Ambuja Cements, Reliance Energy, SBI and TCS were the other major losers.

Ranbaxy and Tata Steel were the only gainers in the list. Ranbaxy surged 2.5 per cent to Rs458. Tata Steel ended a Re higher at 661.

Reliance Petroleum topped the value chart with a turnover of Rs2.48 billion followed by Reliance Capital (Rs2.41 billion), BHEL (Rs2.16 billion), Reliance Inds (Rs2.07 billion) and Larsen & Toubro (Rs2 billion).

Ispat Industries led the volume chart with trades of around 21.5 million shares followed by Tulsi Extrusions (15.4 million shares), Reliance Natural Resources (14.8 million), Reliance Petroleum (14.6 million) and Indiabulls Securities (9.6 million).

India's wholesale price index (WPI) rose 7 per cent in the 12 months to March 22, 2008, accelerating from the previous week's rise of 6.68 per cent. The rate is the highest since December 2004. Prospects of further monetary tightening by the Reserve Bank of India (RBI) following a surge in inflation is a cause for concern at a time when the already high rates are pinching the domestic industry. The surge in inflation has triggered fears that RBI my raise cash reserve ratio (CRR). An increase in CRR would suck out liquidity immediately pushing up the cost of funds and thereby curbing demand.

The BSE Mid-Cap index down 1.95 per cent to Rs6,262.85 and BSE Small-Cap index down 1.6 per cent to 7,703.14. BSE Capital Goods index was down 4.5 per cent to 12,620.35, underperforming the Sensex. However, majority of the sectors fared better than Sensex. They were : BSE Power index (down 2.99 per cent to 2,964.08), BSE Bankex (down 2.95 per cent to 7,589.96), BSE Auto index (down 2.5 per cent to 4,378.54), BSE Oil & Gas index (down 2.37 per cent to 10,282.64), BSE Realty index (down 2.34 per cent to 7,346.96), BSE PSU index (down 2.34 per cent to 7,176.05), BSE FMCG index (down 2.21 per cent to 2,292.76), BSE IT index (down 2.06 per cent to 3,687.40), BSE Metal index (down 1.09 per cent to 13,440.35), BSE HealthCare index (down 1.08 per cent to 3,845.83) and BSE Consumer Durables index (down 1.04 per cent to 3,817.65).

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