The Hindu : Business : Sensex snaps four-day gaining streak

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Wednesday, Jan 05, 2011
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Sensex snaps four-day gaining streak

MUMBAI: Despite strong cues from global bourses, the Bombay Stock Exchange sensitive index, Sensex, snapped four-day rally on Tuesday and declined by 62 points to 20498.72 from 20561.05, triggered by sell-off in ICICI Bank and SBI.

Marketmen said the widening current account deficit, which represents net flow of income out of the country, barring capital movements, and inflationary pressures weighed heavily on BSE. Investors were wary that the Reserve Bank of India might raise policy rates at its monetary review meeting later this month, and that affected banking stocks.

In a similar range-bound trading, the National Stock Exchange's wide-based Nifty declined by 11.25 points and closed at 6146.35 against 6157.60.

Profit-booking in banking and realty counters dragged the Sensex down, although buying interest in FMCG and oil and gas stocks provided some support.

“A 72 per cent rise in India's current account deficit in the July-September quarter over the same period last year acted as a dampener for the market as it may restrict the foreign institutional investment flows in the country,” Networth Stock Broking head of institutional business Prakash Diwan said.

The four-day party on the bourses was spoilt primarily by major financial stocks, which, according to experts, came under pressure on fears of probable interest rate hike by the RBI at its meeting later this month to curb inflation.

Private sector lender ICICI Bank, with a loss of 3.45 per cent at Rs. 1,104.10 was the worst hit, while SBI suffered a loss of 3.09 per cent at Rs. 2,733.60. HDFC Bank was no better, with a dip of 1.97 per cent at Rs. 2,343.40.

Rupee loses 28 paise

The rupee on Tuesday tumbled by 28 paise against the dollar to close at 44.98/99 following weak equities amid a good dollar demand.

Analysts said that fresh dollar demand from importers, mainly oil refiners, and some banks expecting further rise in global crude oil prices, which were trading below $92 a barrel in the European market, weighed heavily on the rupee.

The rupee opened slightly higher 44.67/68 from Monday's close of 44.70/71 and touched a high of 44.64 in line with initial rally in domestic equities. But it fell back on late sell-off in equities to a low of 45 before concluding the day at 44.98/99. — PTI

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