Sensex drops 67 pts to 1-wk low

After a slow start mirroring the trend in global markets, the Sensex fell by 125 points intra-day as domestic issues over coal allocation continued to haunt the markets.

While there was a partial recovery in the last hour, the BSE benchmark index still closed with a loss of 67.01 points, or 0.38 per cent, compared to yesterday's close.

Similarly, the wide-based NSE 50-issue Nifty also declined by 28.65 points, or 0.53 per cent, to finish at 5,386.70.

Brokers said the domestic sentiment remained bearish as the Reserve Bank in its FY12 annual report yesterday stated inflation remains the cornerstone of monetary policy action.

Along with the rupee depreciating by 18 paise to 55.44 a dollar, a weakening trend in Asia and lower opening in Europe on signs of slower growth in the US and China and amid rising concerns of Eurozone crisis did not help Indian stock market.

A fall in key stocks like RIL, ICICI Bank, Infosys, Tata Steel, L&T, SBI, M&M and Jindal Steel mainly kept the market under pressure, while rise in ONGC, ITC, Coal India and HDFC restricted the Sensex's loss to some extent.

The interest-rate sensitive realty and banking stocks suffered the most on fears that unchanged borrowing cost might hurt home sales and lending business, said traders.

"Banking and power stocks faced most selling pressure today. RBI has hinted that it might not cut interest rates in near future...European markets also opened lower which underpinned the bearish sentiment," said Nidhi Sarswat, Senior Research Analyst, Bonanza Portfolio.

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