The Hindu : Business : Sensex slumps 264 points

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Tuesday, Mar 08, 2011
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Sensex slumps 264 points

Rate hike concerns, political worries trigger selling

MUMBAI: The Bombay Stock Exchange benchmark index, Sensex, on Monday slumped by about 264 points as fresh political concerns in New Delhi and fears of another hike in interest rates amid soaring crude prices triggered intense selling, particularly in the auto sector.

The 30-share index closed at 18222.67, down by 263.78 points, or 1.43 per cent. During the day, the barometer fell by a hectic 428 points.

All the sectoral indices lost between 0.19 per cent and 2.55 per cent.

The National Stock Exchange's 50-share Nifty dropped by 75.60 points, or 1.36 per cent, to 5463.15.

Brokers said investors resorted to selling as the Dravida Munnettra Kazhagam, a key ally of the Congress-led UPA Government, said that it was pulling out of the government, which raised fresh political concerns.

“After cheering the budget, the market resumed its downward journey amid fresh trouble for the UPA-II regime,” IIFL Head of Research (India Private Clients) Amar Ambani said. Interest rate-sensitive auto, realty and banking stocks were battered.

“Sentiment was also hit by a fresh spike in crude oil amid continued violence in Libya and other parts of the Middle East,” Mr. Ambani said.

Global crude oil, which crossed $106 a barrel mark to about 29-month high also worried market participants .

The BSE auto index suffered the most among sectoral indices losing 2.55 per cent. Maruti Suzuki dropped by 3.73 per cent to Rs.1,264.70, while Tata Motors fell by 3.64 per cent to Rs.1,127.25. The total market breadth remained negative with 1,972 stocks closing with losses while 908 finished with gains on the BSE. The total market turnover was sharply low at Rs.2,442.57 crore against Rs.3,165.97 last Friday. Foreign institutional investors (FIIs) pumped in Rs.1,373.50 crore in the last three trading sessions since March 1.

Rupee sheds 6 paise

The rupee on Monday declined by 6 paise to close at 45.04/05 against the U.S. currency due to mild dollar demand from importers and weak equity markets.

At the interbank foreign exchange market, the rupee opened lower at 45.10/11 from last weekend's close of 44.98/99. It touched a low of 45.1750 before closing at 45.04/05, down by 6 paise. — PTI

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