Sensex slips sharply to close 121 points lower

Succell

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posted on 12 years ago — updated on 1 second ago

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November inflation stuck above 9 per cent while most experts had expected inflation to drop below 9 per cent.

Mumbai: The Sensex wiped out all its Tuesday's gains post higher than expected monthly inflation numbers and weak European cues. Capital goods, banks, power, auto and realty stocks took beating in the second half of trade. The Sensex fell 121.37 points, to close at 15,881.14 and the Nifty dropped 37.35 points, to end at 4,763.25.

Wednesday's inflation suggested that the Reserve Bank of India may not cut interest rates in Friday's policy meet; which means high interest cost remains a cause of concern for companies coupled with current slowdown worries.

November inflation stuck above 9 per cent while most experts had expected inflation to drop below 9 per cent. Inflation eased to 9.11 per cent versus 9.73 per cent in October.

Experts believe the Reserve Bank of India (RBI) will not cut rates in the monetary policy on December 16.

Rajiv Anand of Axis AMC feels that the RBI will cut rates in April, assuming that the trajectory of both inflation and growth continue at the current levels.

Consistent fall in the Indian rupee was another biggest worry for the market. Ajay Srivastava, chief executive officer of Dimensions Consulting says that this rapid decline could have serious repercussions for the market and economy in general, going ahead.

The rupee fell by 53 paise to 53.75 a dollar and declined by 91 paise to 70.08 an euro.

Srivastava says that though optimism persists now, no V-shaped recovery is in view as the street expects. "In fact, January is where all the action is going to be and it is definitely not going to be a good one," Srivastava warns.

Shares of M&M, Tata Steel, Tata Power and DLF topped the selling list in the late trade, falling 3.5-4 per cent. HDFC, Coal India, NTPC, BHEL, Hero Motocorp and Sterlite tumbled 2-2.7 per cent.

Index heavyweights Infosys, L&T and ONGC slipped 0.5-1 per cent. Shares of private banks - HDFC Bank and ICICI Bank slipped around 0.5 per cent.

However, ITC, Bharti Airtel and Wipro gained 0.6-0.1.1 per cent. Sun Pharma rallied 1.7 per cent.

Declining ones outnumbered advancing by 1674 to 1109 on the BSE.

On the global front, European markets like France's CAC, Germany's DAX and Britain's FTSE fell 0.5-1 per cent. Asian markets closed with loss of around 0.3-0.9 per cent.