Funds push Sensex to 247-pt dive

Sensex declined by 247 points to extend the losses for the third day in succession.

Extending losses for the third day,the benchmark Sensex plunged by 247 points to close at a six-week low on across-the-board selling by investors after food inflation crossed 8 per cent mark fanning fears of yet another rate hike.

After a promising opening,the 30-share Bombay Stock Exchange came under hectic selling after midsession and closed at 17,693.18,a steep fall of 247.37 points or 1.38 per cent.

All 13 sectoral indices ended in the red,with realty,auto,FMCG and metal segments suffering the most.

Story continues below this ad

In straight three days,the Sensex has tumbled by 621.15 points or 3.39 per cent and in last eight trading sessions,since July 26 when the apex bank hiked interest rates,crashed by a total 1,178.11 points,or 6.24 per cent.

Brokers said heavy selling by foreign funds dampened the market mood. FIIs sold shares worth Rs 869.69 crore on Wednesday as per provisional data.

“Sell off intensified in the second half of the session as the sentiments turned negative on high inflation statistics despite the aggressive hike in the interest rates by the RBI,” Shanu Goel,Senior Research analyst-Bonanza Portfolio said.

The official data showed a rise in inflation to 8.04 per cent for the week ended July 23,from a 20-month low in the previous week,renewing fears of interest rate hike by RBI.

Story continues below this ad

Market analysts said sentiment was also impacted by Finance Minister Pranab Mukherjee’s speech in Parliament on price rise which did not outline any further strategy to control inflation.

The broader NSE 50-issue Nifty also plunged by 73 points or 1.35 per cent to 5,331.80.

Fall in heavyweights like ITC,RIL,M&M and Infosys Tech together contributed over 100 points to the Sensex slide.

Overall,28 out of 30 index-based scrips closed with losses.

Largest tractor and utility vehicles maker by sales M&M was the top loser from the Sensex pack with a fall of 4.45 per cent after the government said that it may consider removing subsidy for diesel-run cars. Diesel is the most consumed fuel in the country but is sold at a discount of Rs 6.82 per litre to the cost of production.

Story continues below this ad

Tobacco giant,ITC was the second with a fall of 3.17 per cent on fears of rise in excise duty on tobacco products.

Market behemoth Reliance Industries fell by 1.53 per cent,pulling the Sensex down.

Other major losers were NTPC (2.48 per cent),Hindalco (2.47 per cent),Bajaj Auto (2.46 per cent),DLF (2.20 per cent),Cipla (2.06 per cent),Tata Power (1.88 per cent),Jindal Steel (1.80 per cent) and Tata Motors (1.55 per cent).

From sectoral indices,BSE-Realty dipped by 2.16 per cent,BSE-Auto by 2.06 per cent,BSE-FMCG by 1.82 per cent,BSE-Metal by 1.76 per cent and BSE-Power by 1.61 per cent.

Story continues below this ad

The total market breadth at BSE remained negative as 1,705 stocks ended with losses,as against 1,127 that closed with gains. The turnover rose further to Rs 2,949.08 crore from Rs 2,576.76 crore on Wednesday.

Asian markets ended narrowly mixed today. Key indices from Hong Kong,Singapore and South Korea finished in the red while from China,Japan and Taiwan settled in the green.

European shares too were trading in negative terrain in their late afternoon deals. The CAC was down by 0.55 per cent,the DAX by 0.50 per cent and the FTSE by 1.13 per cent.