Mumbai: High inflation and a rush of profit selling snapped an early rally in the stock market, whose benchmark index finally settled 113 points down at 12,430.40 points on 16 March.
Worried that inflation, which surged to 6.46% during the week ended 3 March against 6.10 in the previous week, could lead to rise in interest rates, the investing fraternity went on a selling spree, dealers said.
The other cause for concern was the sustained selling by foreign institutional investors (FIIs) in the last few days, besides negative global factors, they added.
The Bombay Stock Exchange (BSE) 30-share Sensitive Index (Sensex), opened firm at 12,570.52 from the closing of 12,543.85 the previous day (15 March) and rallied further to a high of 12,638.78 on the back of firm trend in global markets.
However, higher inflation data took its toll on share values, sending the Sensex tumbling to more than 5-month intra-day low of 12,316.10 before ending the day at 12,430.40, a steep fall of 113.45 points or 0.90%.
The broader S&P CNX Nifty of the National Stock Exchange (NSE) also dipped by 35.05 points, or 0.96%, to finish the day at 3,608.55 from previous close of 3,643.60.
FIIs turned net sellers and after pulling out Rs861.40 crore on 14 March, they withdrew Rs541.37 crore from cash and Rs1,281.96 crore from derivatives on 15 March.
Smart rallies in top heavyweight, RIL, and auto-giant, Tata Motor, cushioned the fall in the index to some extent.