Sensex drops 289 points to 5-month low
The Bombay Stock Exchange benchmark index Sensex, which had lost 467 points in the last two trading sessions, fell further by 288.46 points to 18,395.97, a level last seen on September 3, 2010, as investors indicated that rising prices and interest rate hikes would crimp company profits.
The index touched the day’s low of 18,235.45
Similarly, the broad-based National Stock Exchange index Nifty dipped below the 5,500 level before ending 92.15 points lower at 5,512.15 led by interest-linked stocks like realty, auto, consumer durable as well as the metals sector.
A weak Asian trend and lower opening in Europe further dampened the trading sentiment.
Stock markets have continued to decline since January 25, when the Reserve Bank of India increased interest rates for the seventh time since March and revised upwards its inflation forecast to 7 per cent by the end of this fiscal.
Brokers said that rising input costs were eating into the margins of most consumer companies and raised concerns among investors on their earnings.
The realty sector index suffered the most by losing 4.96 per cent to 2,279.62, followed by consumer durables index by 3.91 per cent to 5,923.17. The auto sector index lost 3.56 per cent to 8,841.90.
The heaviest on the Sensex, Reliance Industries fell by 3.02 per cent to Rs 914.50 and second-heaviest Infosys Technologies by 0.68 per cent to Rs. 3,173.50. The two carry nearly 23 per cent weightage on the index.
As the selling pressure spilled over a wide-front, smallcap index lost 3.59 per cent to 8,546.29 and midcap index by 2.66 per cent to 6,898.37.