In a highly volatile trade on Tuesday, the BSE Sensex erased early gains and fell nearly 109 points to 14-month low of 16,731 on concerns of high inflation and rise in interest rates, amid a dip in European equities on fears of weakness in global economy.
Brokers said the nominal fall in inflation to 9.22 per cent in July, from a 9.44 per cent in June, was not enough to avert fears of a further rise in interest rates. Besides, they said the European markets were down on stagnant growth numbers from Germany, fuelling concerns about the health of the world economy.
The Bombay Stock Exchange benchmark Sensex touched a high of 17,035.49, up 187 points, within a few minutes right from the onset of business on strong cues from Asian markets. But, gradually it fell in the negative terrain on hectic fag-end selling to close at 16,730.94 — lowest since June 9, 2010 — a fall of 108.69 points or 0.65 per cent.
Realty stocks suffered the most, pulled down by DLF after it was slapped a Rs 600 crore fine by competition watchdog CCI for allegedly abusing dominant market position.
Some of the metal, banking and refinery counters also attracted profit-booking, while IT stocks were in demand after smart rise on tech-heavy Nasdaq Composite Index last night.
The broad-based NSE 50-share Nifty also declined further by 37.15 points or 0.73 per cent to 5,035.80. Selling in index-based stocks like HDFC, HDFC Bank, L&T, ONGC, Hindalco, Jindal Steel, HUL, Jaipra Associates, ICICI Bank, DLF and Tata Steel mainly contributed to the Sensex fall. However, a smart rise in TCS, ITC, Bharti, Infosys and BHEL cushioned the fall. Offloading was strong in second-line shares. BSE-Smallcap and Midcap indices fell 2.10 per cent and 1.79 per cent. Meanwhile, FIIs sold shares worth Rs 404.5 crore on last Friday according to Sebi data.
