Sensex drops 60 points as rate fears send bank stocks down

The Sensex fell 60 points today, the first drop in six days, led by financial stocks after weak inflation data indicated the RBI would raise interest rates.
HDFC Bank, ICICI Bank, HDFC and State Bank of India dragged the Sensex lower after WPI inflation for September came in at a seven-month high of 6.46 per cent. The major index losers included Hero MotoCorp and Tata Power.
Nine of the 13 sectoral indices fell, led by bank, realty and consumer goods stocks.
Hindalco Industries gained 1.45 per cent, recovering from initial losses. The CBI lodged a case against Chairman Kumar Mangalam Birla and others in connection with the allocation of coal blocks eight years ago.

The S&P BSE Sensex resumed higher at 20,722.90 and moved up to 20,759.58, the highest intra-day level since November 11, 2010, on the back of higher global cues, continuing capital inflows and expectations of good corporate results.
The index, however, failed to sustain the gains and ended at 20,547.62, a loss of 59.92 points or 0.29 per cent. It had gained 712 points in the previous five trading sessions.

"Profit booking and higher inflation numbers are most likely to be the reasons for today's selling pressure," said Rakesh Goyal, Senior Vice President at Bonanza Portfolio Ltd. "Investors are once again speculating that higher inflation can lead to higher rates also in near term."

The CNX Nifty on the National Stock Exchange was down 23.65 points, or 0.39 per cent, to 6,089.05. The SX40 index on the MCX Stock Exchange ended at 12,228.55, down 41.2 points.
HDFC Bank fell 2.37 per cent even as the company reported a 27 per cent jump in Q2 profit to Rs 1,982.3 crore.
Reliance Industries was down 0.41 per cent. It posted a 1.5 per cent increase in profit and became the first Indian company to achieve quarterly sales exceeding Rs 1 lakh crore.
Overseas investors bought shares worth a net Rs 730.29 crore, according to provisional data from the stock exchanges.

Asian stocks ended mostly higher on optimism a deal would be reached in the US to avoid a breach of the debt limit this week.