Stocks

Bank, IT pull Sensex down 118 points

PTI Mumbai | Updated on February 23, 2011 Published on February 23, 2011

The BSE benchmark Sensex today fell by 118 points to 18,178.33 as funds sold on concerns that surging oil prices amid instability in the Middle East will push up inflation, prompting interest rate hike.

Besides, major players squared up their long positions ahead of tomorrow’s monthly expiry in the derivatives segment, against the backdrop of weak trend in overseas stock markets.

The Bombay Stock Exchange benchmark index Sensex, which lost 142 points on Tuesday, rolled down further by 117.83 points to close at 18,178.33. The fall was led by the stocks of banking and software exporting companies.

The wide-based National Stock Exchange index Nifty also declined by 31.85 points or 0,58 per cent to 5,437.35.

Brokers said investors were worried about a possible steep hike in interest rates as rising crude oil prices, in view of political turmoil in Libya and other parts of the region, might force central banks in Asia including India to hike the key rates to curb inflation.

Brent crude oil has jumped to its highest levels of about $108 per barrel in more than two years on fears of disruption in supplies from the Middle East and North Africa.

“A series of negative factors ahead of the general Budget and settlement in the derivatives segment is keeping investors on the sidelines,” said a Delhi-based broker Rajiv Malik of RNM Financial Services.

Meanwhile, a spurt in ADAG group companies like Reliance Infra and RCom cushioned the fall.

The Sensex downtrend was also checked by the most-heaviest on the index, Reliance Industries, which gained further by 1.15 per cent to Rs 996.35 in continuation to Tuesday’s rise of 2.98 per cent, buoyed by reports of the company’s $7.2-billion deal with UK energy giant BP.

The banking index suffered the most by losing 1.75 per cent to 12,096,34. The IT index was the second worst performer by losing 1.5 per cent to 6,269.78 as the second heaviest on the index — Infosys Technologies dropped by 1.94 per cent to Rs 3,082.20.

Indian software companies’ ADRs on the Nasdaq recorded fresh losses. With the selling pressure spilling over a wide front, the mid-cap sector index fell by 0.67 per cent to 6,558.63 and the small-cap index by 0.31 per cent to 8,036.41.

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Published on February 23, 2011
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