Sensex falls 156 pts on inflation, interest rate concerns

Mumbai, Apr 29 (PTI) The BSE Sensex fell for the fifth
day in a row on Friday, slipping another 156 points to 19,135
amid investor concerns that high inflation will lead to
another round of hike in interest rates, hitting corporate
margins.
The Sensex has fallen nearly 450 points or 2.3 per cent
in the last five sessions.
Marketmen said interest rate sensitive banking and realty
stocks took a beating as investors feared imminent rate hike
by the Reserve Bank of India (RBI) to rein in inflation.
Capital goods, consumer durables, metals and PSU stocks
were the other major losers of the day ahead of RBI meeting
next week.
Investor sentiment has already been hit by companies
posting below-expected earnings for the fourth quarter (Q4)
ended March, against the backdrop of high inflation and
interest rates.
Soaring oil prices have further fanned concerns of higher
inflation. India imports over 70 per cent of its crude oil
needs, which impacts prices across the economy.
Although crude prices eased a little after Q1 GDP numbers
in the US showed a decline, coupled with higher jobless
claims, they still remain very high.
New York's main contract for June is ruling at above USD
112 per barrel, while London's Brent North Sea crude is still
close to USD 125.
FIIs sold shares worth Rs 832.59 crore yesterday as per
the provisional figures issued by stock exchanges.
The 30-share Bombay Stock Exchange barometer opened
higher at 19,292.57 from last close and moved in the range of
19,356.50 and 19,015.05 before settling at 19,135.96, down
156.06 points or 0.81 per cent.
The NSE 50-share nifty also ended lower by 35.95 points
or or 0.62 per cent to 5,749.50.
"Banking stocks dragged the market down. Interest rate
sensitive sectors like realty and capital goods continued to
be under pressure. Fertiliser stocks witnessed profit
booking," Bonanza Portfolio Limited Senior Research Analyst
(Equity) Shanu Goel said.
Meanwhile, IIFL Head of Research (India Private Client)
Amar Ambani said, "There is a lack of catalyst to lift the
market out of the current range. One has to see how they
approach the market in May."

Meanwhile, European markets edged lower in early trade,
snapping a 6-session winning streak, with investors taking
profits from eight-week highs. The key benchmark indices in
France and Germany were down 0.34 per cent and 0.09 per cent.
Markets closed in London for the Royal Wedding holiday.
Asian stocks ended lower on slowdown in the US economy.
The key benchmark indices in Singapore, South Korea,
Taiwan and Hong Kong slipped by between 0.36 per cent and 0.72
per cent, while China's Shanghai Composite rose 0.87 per cent.
Japanese markets were closed for a public holiday.
Major losers from the Sensex pack were Larsen (3.87 pc),
ONGC (2.79 pc), Jindal Steel (2.71 pc), Jaiprakash Asso (2.57
pc), DLF (2.37 pc), Bharti Airtel (2.06 pc), HDFC Bank (1.98
pc), SBI (1.87 pc), M&M (1.80 pc), Hindalco (1.49 pc) HDFC
(1.35 pc) and Sterlite Ind (1.07 pc)
However, HUL shot up 2.24 per cent, followed by Maruti
Suzuki 1.27 per cent and Reliance Industries 0.83 per cent.
Among the sectoral indices, the BSE-Capital Goods fell by
2.72 per cent followed by BSE-Realty - 2.66 per cent, Bankex
- 1.76 per cent, BSE-CD - 1.30 per cent, BSE-Metal - 1.21 per
cent and BSE-PSU - 1.04 per cent.
Small-cap and Mid-cap indices were also finished lower by
1.57 per cent and 1.03 per cent respectively.
The total market breadth continued to remain weak as
1,960 counters closed in the red, while 940 stocks finished
in the green on the BSE. The total turnover was relatively low
at Rs 3,000.76 crore from 3,087.47 crore yesterday.