The Hindu : Business : Imminent fuel price hike spooks market

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Friday, May 30, 2008
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Imminent fuel price hike spooks market

MUMBAI: The markets witnessed selling pressure on Thursday as investors sold auto and power stocks giving into fears that any hike in retail fuel prices would hit bottomlines of companies in these sectors. The Bombay Stock Exchange sensitive index shed 209.11 points to close at 16316.26.

Selling activity was also significant in refinery and banking counters, even as expectations of inflation, data of which is released on Friday, moving up weighed heavily on trading sentiment.

The Sensex resumed higher at 16666.03 in the morning, but dropped to a low of 16196.02 before concluding the day at a nearly one and half month low of 16316.26, a fall of 1.27 per cent over Wednesday’s close. The 50-issue S&P CNX Nifty of the National Stock Exchange also dropped by 83.05 points to 4835.30 from the previous close of 4918.35.

The last day of May derivatives contract also contributed to the fall, as operators booked profit, besides sustained selling by foreign funds, despite firm global markets. Capital goods counters attracted good buying support. Besides China, most of the other Asian indices ended in the positive territory, while European markets were also trading firm early morning. Country’s largest engineering and construction giant Larsen & Toubro spurted by 6.64 per cent due to announcement of a liberal 1:1 bonus issue and a total dividend of Rs. 17 per share for the year ended March 2008.

Shares of leading automaker Tata Motors dropped more than eight per cent to 582.55 following the announcement of company’s fund raising plans to finance the buyout of the U.K.’s luxury brands Jaguar and Land Rover. — PTI

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