Tuesday, January 11, 2011

Sensex extends losses for 6th day in highly volatile trade

MUMBAI: In a highly volatile trade, the BSE benchmark Sensex today extended losses for the sixth straight session, falling 28 points as sentiment remained shaky amid fears of likely interest rate hike.

The Bombay Stock Exchange benchmark Sensex, which lost 1,335 points in last five trading sessions and dipped to four month low, settled with a loss of 27.78 points to 19,196.34 with stocks in realty, IT and refinery sectors declined.

About 14 stocks fell, and 16 gained in the 30-BSE index components. The two heavily-weighted Reliance Industries and Infosys Technologies recorded hefty losses.

The gauge covered nearly 428 points in two-way movements during the session before ending in the negative zone on emergence of fag-end selling by funds.

Similarly, the broad-based National Stock Exchange index Nifty fell 8.75 points to 5,754.10, after dipping to 5,698.20 as selling at every rise was wiped out on brisk selling.

Equities continued to slide as investors were jittery amid concern that the Reserve Bank might raise interest rates at its meeting later this month to curb rising inflation.

Selling pressure was so strong that even a better trend in the Asian region and higher opening in Europe failed to influence the market sentiment.

Meanwhile, the government grappled with high prices of essential commodities as Prime Minister Manmohan Singh called a meeting of ministers to find ways to tame food inflation which has crossed 18 per cent.

Reliance Industries dropped by Rs 16.75 to Rs 1,014.30 and second-heaviest Infosys by Rs 67.40 to Rs 3,329.25. The two carry nearly 23 per cent weightage on the Sensex.

Among the sectoral indices, barring the most battered banking, auto and metal, all others closed with notable losses between 2.74 to 0.08 per cent.

The realty sector, which has been falling for the last five straight sessions on fears that a hike in interest rate might effect sale of new homes, lost 2.74 per cent to 2,500.61 followed by IT sector index by 1.60 per cent to 6,562.65.

The IT stocks fell on concerns that the deepening crisis in the European deb sovereign might effect earnings. Over 50 per cent of the Indian software exporting revenue comes from the US and European markets.

A rise in stocks of metal, bank and auto cushioned the market and saved from any major fall. The banking index gained by 1.24 per cent to 12,288.49 on expectations the rise in interest rate would boost earnings.

The metal sector gained 0.12 per cent to 16,527.40 as Hindalco Industries, the biggest aluminium producer climbed as metal prices rallied. The copper gained in London by 1.3 per cent on expectations the demand will outpace supply.

The auto sector index rose by 0.37 per cent to 9,318.54 as Bajaj Auto, the second- biggest motorcycle maker, rebounded from its lowest level since July.

Read more: Sensex extends losses for 6th day in highly volatile trade - The Times of India http://timesofindia.indiatimes.com/business/india-business/Sensex-extends-losses-for-6th-day-in-highly-volatile-trade/articleshow/7259976.cms#ixzz1AjNldq34

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