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Sensex on a tailspin

Special Correspondent

Record global oil prices and rising inflation affect sentiment

— PHOTO: VIVEK BENDRE

OIL PRESSURE: An onlooker trying to capture stock exchange building in Mumbai in his mobile phone on Friday. The ensex, dipped by more than 600 points on rising inflation and record global oil prices.

MUMBAI: The Bombay Stock Exchange (BSE) 30-share sensitive index (Sensex) dipped to its nearly 14-month low to 13802.22 by losing 619.60 points or 4.30 per cent on heavy selling pressure, due to record global oil prices and rising inflation.

In intra-day, the Sensex recorded a low of 13760.24 and a high of 14127.76. On the National Stock Exchange (NSE) the 50-share Nifty lost 179.20 points at 4136.65, after touching the day’s low of 4119.20 and a high of 4315.30 points. The fall was led by banking stocks (5.34 per cent), automobiles (5.26 per cent), power (4.87 per cent), metal (4.53 per cent), realty (4.45 per cent), PSU (4.29 per cent) and IT ((4.24 per cent).

Weakness across the global markets and rising global crude oil prices affected sentiment on the domestic bourses. Nervousness in the market is likely to continue following a fall in the overnight U.S. market, escalating global crude oil prices and weak Asian indices.

PTI reports:

The Sensex, which withstood pressure after the Reserve Bank announced on Tuesday further tightening of money supply, collapsed to register its biggest single day fall since March 31. In the past two days, Sensex had gained over 300 points.

Marketmen said that the statement from Finance Ministry that double digit inflation would linger on for some more time heavily impacted investor sentiment.

As investors resorted to aggressive selling across-the-board, heavyweight stocks Tata Motors and HDFC were battered and all sectoral indices closed in the red.

Brokers said leading rating agencies Standard & Poor’s and Crisil lowered India’s growth forecast attributing it to a strong surge in inflation in the past couple of weeks.

The market breadth was extremely negative as 2,051 stocks registered losses while 601 others closed in the green.

The trading volume was high at Rs. 6,015 crore. RIL was the top traded scrip with highest turnover of Rs. 540.26 crore, ACC (Rs. 374.68 crore), Reliance Capital (Rs. 308.50 crore), RPL (Rs. 285.00 crore) and Tata Steel (Rs. 258.38 crore).

The broad-based BSE-100 index fell by 321.11 points or 4.25 per cent to 7228.84. The Bankex and Auto index dipped by more than 5 per cent while power, metal, realty, PSU, IT and capital goods indices dived by more than 4 per cent.

Rupee loses 20 paise

The rupee fell on Friday as record high global oil prices pumped up dollar demand from oil refiners and a sharp fall in share prices raised concerns that foreigners could further trim local equity holdings. The rupee closed at 42.8750/8850 a dollar against Thursday’s close of 42.6750/6850. Oil touched a fresh record above $142 a barrel.

“We had Reserve Bank of India (RBI) selling some dollars, which checked the fall,” a trader with a State-run bank said, referring to the RBI.

The central bank has sold dollars in recent sessions, helping the rupee stay above the 43/dollar level.

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