Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Money / Sensex slumps on concern over inflation
BackBack

Sensex slumps on concern over inflation

Sensex slumps on concern over inflation

Premium

Mumbai: India’s benchmark stock index fell the most in two months after food price inflation stayed above 15%, suggesting credit may soon be tightened. Larsen and Toubro Ltd (L&T) sank after its first quarterly sales drop in seven years.

Housing Development Finance Corp. Ltd (HDFC), India’s biggest mortgage lender, slipped 3.6%, its steepest one-day slide in three months. The pace of food price increases has exceeded 15% for nine weeks. The next monetary policy meeting is on 29 January. L&T sank 6.8%, the most in six months after quarterly sales fell and it cut its revenue growth target.

“The market was already feeling the weight of inflation," said Kishor Ostwal, managing director of CNI Research (India) Ltd, a publicly traded equities research provider in Mumbai. “Larsen’s results added to its woes."

The Bombay Stock Exchange’s Sensex fell 423.35, or 2.4%, to 17,051.14 points, its biggest drop since 3 November. The S&P CNX Nifty Index on the National Stock Exchange lost 2.4% to 5,094.15. The BSE 200 Index retreated 2.4% to 2,157.57.

HDFC dropped 3.6% to Rs2,437. State Bank of India, the nation’s biggest lender by market value, slid 1.7% to Rs2,124.10.

An index of wholesale food articles compiled by the commerce ministry increased 16.81% in the week ended 9 January from a year earlier.

India’s rising inflation is a “matter of concern" and the government is keeping a constant watch on prices, finance minister Pranab Mukherjee said in New Delhi on Wednesday.

HDFC Bank Ltd, the third biggest lender by market capitalization, lost 2.5% to Rs1,711.65. ICICI Bank Ltd, the country’s second biggest lender, slid 2.9% to Rs852.70. Axis Bank Ltd, the fourth largest, dropped 2.1% to Rs1,061.25.

“Inflation is the main worry," said Ajay Argal of Birla Sun Life Asset Management Co. in Mumbai. “We can expect some measures of monetary tightening."

L&T sank 6.8% to Rs1,524.10, its steepest drop in at least six months. The company cut its sales forecast for the year ending 31 March after customers delayed projects, vice-president R. Shankar Raman said in an interview. His comment came after the company said third quarter profit fell 50% from a year earlier to Rs759 crore in the period ended 31 December. The company had a one-time gain in the same period a year earlier.

Developing Asian economies face the risk of asset bubbles or overheating as the region’s growth outpaces the rest of the world this year, the World Bank said in a report on Thursday. In South Asia, policymakers will be “particularly responsive" to signs of building inflationary pressures because of a strong aversion to food price increases, the World Bank said.

feedback@livemint.com

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 22 Jan 2010, 12:16 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App