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High inflation knocks down Sensex by 489 points

High inflation knocks down Sensex by 489 points
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First Published: Fri, Apr 04 2008. 04 49 PM IST
Updated: Fri, Apr 04 2008. 04 49 PM IST
Mumbai: The markets ended down Friday with the Bombay Stock Exchange benchmark Sensex dropping nearly 489 points as the investor sentiments were dampened by fears of a hike in interest rates, following ballooning of inflation.
The three-day long upward march was snapped as the Sensex declined 489.43 points at 15,343.12 on aggressive selling by funds in stocks of capital goods, realty, power, metal, auto, refiners and banking sectors.
The key-index touched the day’s high of 15,896.09 and a low of 15,303.04 points.
The wide-based National Stock Exchange index Nifty dropped by 124.60 points at 4647.00, after touching a high of 4791.70 and a low of 4632.70 points.
HDFC led the drop among lenders on speculation of higher interest costs would stem loan demand. Bharat Heavy Electricals, the nation’s biggest power equipment maker, slumped to a seven-month low after the company said profit growth may slow on higher material costs.
Record raw-material prices has jacked up inflation, prompting the government to impose price controls and curb exports of essential commodities.
Capital goods sector index suffered the most by dropping 594.38 points at 12,620.35 followed by oil and gas by 249.24 points at 10,282.64. Bank index by 230.66 points at 7589.96, realty index by 176.36 points at 7346.96, metal index by 148.41 at 13,440.35 and PSU index by 171.73 points at 7175.05.
As the selling pressure spread over a wide-front, smallcap index lost 125.30 points at 7715.99 and midcap index by 124.38 points at 6262.95.
Afternoon Update
Mumbai: The Bombay Stock Exchange benchmark Sensex wiped off early gains by losing over 387 points at noon on Friday on heavy selling after inflation rose to a three year high at 7%.
The 30-share index, Sensex, which commenced the day higher at 15,896.09, fell back to record a loss of 387.16 points at 15,445.39 at 1200 hours.
Inflation galloped to 7% for the week ended 22 March, on higher prices of food, vegetables, minerals and manufactured items, even as measures to tame prices are expected to take effect only in 2-3 weeks.
Meanwhile, second wide-based National Stock Exchange index Nifty fell by 102.70 points at 4668.90 as some of the heavy weights fell sharply after blue-chip companies announce their quarter earnings below market expectations.
Bharat Heavy Electricals Ltd. fell for a fifth day, losing Rs89.70 at Rs1665.25 after JPMorgan Chase reduced its share price estimate for India’s largest producer of power equipment to Rs2,200 from Rs2,850 earlier. Bharat Heavy reported its worst quarterly profit decline in six years on Thursday.
Reliance Industries, a index-heavy dropped by Rs34.75 at Rs2359, Reliance Energy by Rs39.35 at Rs1150.10, State Bank of india by Rs32.10 at Rs1607, Infosys Technologies by Rs45.50 at Rs1478.15 and Housing Development Finance Corporation Ltd by Rs110.65 at Rs2332.25.
Mumbai: The Bombay Stock Exchange benchmark Sensex lost 90 points in late morning trading on Friday as investors adopted cautious approach due to weekend amid mixed global cues.
The BSE bellwether turned weak after opening firm and was quoted at 15,743.01 at 1030 hours, down 89.54 points from its last close of 15,832.55.
The broader 50-share S&P CNX Nifty of the National Stock Exchange also fell by 4.90 points to 4,766.70 at 1030 hours from its previous close of 4,771.60.
Market players said investors preferred to book profits at the prevailing levels due to week-end considerations as the US government is expected to release its non-farm payrolls report for March.
The market is expected to remain weak during the day, they added.
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First Published: Fri, Apr 04 2008. 04 49 PM IST
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