Sensex extends losses, ends 369 pts down

Sensex extends losses, ends 369 pts down

It was another day in the red for bank, realty, capital goods and power stocks as participants pressed heavy sales in these sectors amid growing concerns over declining growth. Oil, auto and FMCG stocks too had a weak outing.

Metal stocks opened on a firm note but pared their gains as the session progressed. Select pharma stocks edged higher on stock specific support. Information technology stocks moved up thanks to the rupee's decline against the US dollar.

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Weak US and Asian markets, a surge in crude oil prices and the market regulator SEBI's decision to refrain from altering the guidelines on FII investments through participatory notes were among the factors that contributed to the market's fall today. Also, investors appeared reluctant to pick up stocks ahead of release of inflation data and a long weekend.

While the 30 share BSE sensitive index Sensex, which nosedived to a low of 14,686.66 in late afternoon trade, ended the day with a loss of 368.94 points or 2.44% at 14,724.18, the broader 50 stock Nifty index of the National Stock Exchange settled with a loss of 98.35 points or 2.17% at 4430.70, near its intra-day low of 4421.25.

IT bellwether Infosys Technologies (3.95%) ruled firm right through the session today. Satyam Computer Services gained 1.4%. Tata Consultancy Services edged up by 0.45% while Wipro failed to retain gains and ended in the negative territory.

Tata Power (1.6%), Sterlite Industries (1.2%) and Tata Steel (0.95%) closed on a firm note. Ranbaxy Laboratories edged up marginally. Realty stock DLF went down by 8.65%. Jaiprakash Associates and Reliance Infrastructure lost around 7.75%. State Bank of India eased by 6.2%. ICICI Bank and HDFC Bank lost over 5%.

Capital goods heavyweights Larsen & Toubro (down 4.8%) and BHEL (down 4.45%) posted sharp losses. Reliance Communications slipped by 3.75%. HDFC Bank ended 3.45% down. Maruti Suzuki, ACC, Reliance Industries, Hindalco and NTPC lost 2.5% - 3%.

Hindustan Unilever, ITC, Mahindra & Mahindra, ONGC and Grasim Industries also closed with sharp losses. Tata Motors and Bharti Airtel lost around a quarter per cent each.

Punjab National Bank, Unitech, Tata Communications, Hero Honda, Ambuja Cements, Zee Entertainment, Nalco, Power Grid Corporation, Dr. Reddy's Laboratories, BPCL, Idea Cellular and ABB ended sharply lower today. HCL Technologies, Cairn India, Sun Pharmaceuticals and Cipla closed on a positive note.

As selling pressure took a toll of midcap and smallcap stocks as well, the market breadth was weak today. Out of a total of 2730 stocks traded on BSE, 1849 stocks closed weak. 811 stocks ended higher and 70 stocks closed flat.
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Source:Sify,ET,UTV

Inflation soars to the high of 12.44 percent

Inflation soars to fresh 13-yr high of 12.44%
Inflation moves up to 12.44%

Showing no sign of reversing its rising graph, inflation soared to a fresh 13-year high of 12.44 per cent for the week ended August 2, on the back of rising food and fuel prices. While the index for fuel items, for instance, rose by 0.9 per cent, the index for food items was also up by 0.9 per cent. Raw rubber rose by 5 per cent and maize 4 per cent. WPI for all commodities was up by 0.3 per cent. Earlier during the day a strong wave of selling towards end of session saw the Sensex end at day’s lows.

The market was abuzz that inflation numbers would be above 12.4 per cent against media expectations of 12.16 per cent. Traders also squared off positions ahead of an extended weekend. Annual inflation based on wholesale prices crossed the 12 per cent mark during the week ended July 26, fuelled by costlier manufactured products, fuel and food items other than vegetables. Vegetable prices showed a decline of 8 per cent from the year-ago period. However food products rose by 0.1 per cent, non-food articles 0.4 per cent and textiles by 0.4 per cent. Similarly, primary articles were up 0.1 per cent and chemical and chemical products 0.5 per cent. Fuel and petroleum remained unchanged.

The RBI recently raised its key lending rate for the third time in two months, taking it to its highest in seven years to quell price pressures, dampen demand and keep inflation expectations in check. The apex bank hiked the benchmark short-term rate by 50 basis points, about 25 bps more than what the market had expected, and the cash reserve ratio, the amount of funds banks must keep on deposit with it, by 25 basis points to 9 per cent to absorb surplus cash in the banking system.

"Bringing down inflation from the current high levels and stabilising inflation expectations assume the highest priority in the stance of monetary policy,” the RBI said in its quarterly review. However, the government’s fiscal and monetary measures have so far failed to tame the rising prices, and another round of monetary tightening is feared. “Inflation may peak in November-December and slip into single-digit by March 2009. Going by the current price situation, there may be another round of monetary tightening,” said Prime Minister’s economic advisory council member Saumitra Choudhury recently. Finance ministry’s chief economic advisor Arvind Virmani, however, is cautiously optimistic. At a recent CII conference in Chennai, he said: “The uncertain oil prices make it difficult to make short-term predictions, but in the next 12 months, the inflation rate would return to normal levels of 5-6 per cent.”

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Source: ET,UTV