Sensex retreats from record highs

The BSE Sensex fell on Thursday, retreating from a record high in the previous session, as state-run oil companies such as Bharat Petroleum Corp declined after the government raised excise duty on petrol and diesel.

The government raised excise duty on petrol and diesel, by Rs 1.50 a litre each, to boost revenues and contain budget borrowing that could put off a likely cut in the retail prices of the two fuels.

The Sensex closed down 68.26 points, 0.2 per cent, at 27,940.64 after marking an all-time high of 28,126.48 on Wednesday. The 50-share Nifty lost 25.45 points, or 0.3 per cent, to 8,357.85. Shares of state-run oil companies led the declines after the tax hike and earnings.

Hindustan Petroleum Corp Ltd slumped 6.3 per cent, Bharat Petroleum Corp dropped 4.6 per cent, while Indian Oil Corp fell 4.4 per cent. Separately, oil explorers fell, amid fears of lower realisations after Brent crude hit a four-year low below $80 a barrel. Oil and Natural Gas Corp lost two per cent, Reliance Industries fell 0.5 per cent and Cairn India lost 3.6 per cent.

Rate-sensitive stocks also fell after retail inflation and factory output came in as expected, lowering hopes of any immediate interest rate cuts by the central bank. Housing Development Finance Corp fell 1.2 per cent, while ICICI Bank ended 0.9 per cent lower.