Sensex falls 34 pts on growth worries

The Sensex fell 0.22 per cent on Monday, as investors sold on concerns sluggish economic growth would dent corporate earnings due to higher costs and interest rates.

The Bombay Stock Exchange benchmark Sensex fell 34.08 points to end at 15,814.72, with 16 of its components ending in the red. The broader 50-share National Stock Exchange index Nifty fell 0.1 per cent to 4,742.80.

Prime Minister Manmohan Singh yesterday said the economy would likely withstand an uncertain external environment to grow about seven per cent this financial year, lower than the government’s revised forecast of about 7.5 per cent, last month.

“The investor sentiment was negative right from start. But despite of the prime minister’s comments, the market has not fallen in a big way,” said R K Gupta, managing director at Taurus Mutual Fund.

Shares of Energy major Reliance Industries led Monday’s losses with a 1.2 per cent fall, followed by top telecoms company Bharti Airtel that declined 3.16 per cent. Royal Bank of Scotland has downgraded Bharti and Idea Cellular to hold from buy, and Reliance Communications to sell from hold, citing greater regulatory risk and potential impact of policy uncertainty on growth. Idea Cellular fell 0.06 per cent and Reliance Communications 0.45 per cent.