Sensex sheds 108 points this week on fears of rate hike, weak global cues

The Bombay Stock Exchange benchmark Sensex failed to maintain last week’s gains and shed 108 points due to selling pressure mainly in auto, metal and banking sectors from operators and investors following cautious approach on fears of likely interest rate hike by RBI, and weak global cues.

The 30-share barometer lost 107.94 points or 0.59 per cent to end the week at 18,268.54. The 50-scrip S&P CNX Nifty index on the NSE also declined by 30.95 points or 0.56 per cent to settle below the 5,500-mark at 5,485.80.

However, the BSE Small-Cap index rose 49.77 points, or 0.6 per cent to 8,288.46 and the BSE Mid-Cap index gained 2.14 points or 0.03 per cent to close at 6,898.28.

Global stock markets fell after the Federal Reserve Chairman, Mr Ben Bernanke, said the US economic recovery was proving to be “uneven” and “frustratingly slow’’.

Political worries following reports that the DMK, a key UPA ally at the Centre, may opt to withdraw Ministers from the Cabinet after a high-level party meeting towards the weekend also affected the market sentiment.

Bike major Hero Honda fell by 7.25 per cent to 1,723.95 on reports that the strike by workers of Maruti Suzuki India’s plant at Manesar in Haryana could spread across the auto belt of the northern state. Shares of Maruti fell 0.31 per cent to Rs 1,229.75.

Two-wheeler maker Bajaj Auto lost 3.3 per cent to Rs 1,325.50 on concerns that the firm’s earnings will be adversely impacted if the Government does not extend the tax refund Duty Entitlement Pass Book (DEPB) scheme for exporters beyond June 30.

State-run explorer Oil and Natural Gas Corporation (ONGC) dipped 4.6 per cent to Rs 266.90 on reports that an independent audit of its overseas subsidiary ONGC Videsh has slashed the estimated immediately recoverable or proven reserves of the latter by one-third to 130 million tonnes.

Financial sector stocks fell as the RBI is seen raising its key lending rate at its mid-quarter monetary policy review on June 16 to tame inflation. State-run banking behemoth SBI lost 3 per cent, ICICI Bank shed 1.32 per cent and HDFC Bank slipped by 1.33 per cent.

Food inflation jumped to a two-month high of 9.01 per cent for the week ended May 28 on the back of costlier fruits, onions and protein-based items.

Metal stocks fell as weak US economic data raised doubts about global economic recovery. Hindalco Industries shed 2.6 per cent to Rs 184.45, Sterlite Industries 1.07 per cent to Rs 166 and Tata Steel declined by 0.75 per cent to Rs 569.20.

Among the sectoral indices, the BSE-Auto index fell by 1.97 per cent, the BSE-Metal index 1.31 per cent and the BSE-Bankex by 0.68 per cent. However, the BSE-Consumer Durable index shot up by 3.16 per cent and the BSE-IT index gained 1.50 per cent.

The total turnover of BSE and NSE declined to Rs 12,540.55 crore and Rs 42,603.73 crore, respectively, from the last week-end level of Rs 13,654.50 crore and Rs 54,796.27 crore.

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