The Hindu Business Line : Markets slump on inflation concerns

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Mumbai Feb. 23 The BSE Sensex plunged to its lowest in over a month as market players squared-off their futures positions to meet the margin requirements. The markets also tracked inflation concerns and pre-budget jitters.

The Sensex closed lower for the fourth straight session at 13,632.53, down 2.77 per cent or 388.78 points. The NSE S&P CNX Nifty fell 2.5 per cent to close at 3,938.95.

The markets opened higher in the morning but dropped throughout the day.

"Panic selling was mainly seen from the retail side. There was hardly any selling from the FII and institutional side. Also, one operator unloaded huge positions," said Mr Ravindra Kasliwala, Head-Equity, Inventure Growth and Securities.

FIIs net buyers

FIIs were net buyers for Rs 343.04 crore as per provisional figures on NSE.

The inflation figure, at 6.63 per cent for the week ended February 10, also acted as a dampener to the markets, said a dealer.

Stocks across sectors witnessed heavy beating, with all sectoral indices ending lower. Cement stocks fell sharply on concerns that there may be a hike in the excise duty on cement in the Budget and that exports may be banned.

The stock of ACC Ltd dropped 4.97 per cent at Rs 915.65, Gujarat Ambuja Cements dipped 3.08 per cent at Rs 122.85.

The BSE Bankex index was the biggest loser, down 3.42 per cent at 6,759.58 points. The BSE FMCG and Teck indices dropped 3.35 per cent and 3.22 per cent respectively.

"Investors sold as there were expectations that markets would rise before the Budget, which did not happen," said Mr K.D. Mehru, Vice-President - Equity Research, Khandwala Securities.

The market breadth was overwhelmingly negative with the advance-decline ratio at 1:5 on the BSE. Stocks of 404 companies gained while that of 2,211 companies closed lower. Only the stock of Tata Steel in the Sensex list ended higher at Rs 459.20, up 0.68 per cent.

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