The initial euphoria proved short-lived and market succumbed under intense selling pressure after a sudden spike in headline inflation spooked investor confidence, as the benchmark CNX Nifty moved down by 10 points on the NSE today.
The 50-share Nifty fluctuated heavily between a high of 5,957.25 and a low of 5,798.15 before ending at 5,840.55, a modest loss of 10.05 points, or 0.17 per cent over last close.
After two-day consolidation movement, trading got off to a strong start following across the board buying. Also buoyed by the sentiment on sustained FII inflows, the key benchmark breached the key 5,900 level in early trade. Market maintained its surge on firm retail participation alongwith some short covering triggers.
However, the party got spoiled in mid-afternoon trade after the higher than expected inflation data which triggered heavy profit taking as market had anticipated a modest drop in numbers. It remained under immense selling pressure through the session, but managed to cut shot some losses before concluding.
The wholesale price index shot up to a six-month high at 6.1 per cent in August compared with 5.79 per cent in July, the highest level since February.
Healthcare, technology, metal and energy related shares witnessed massive selling. Financials, fmcg and auto counters attracted good buying support.
The market was just rallying on the back of heavy short covering-led rally driven by the initial optimism after Raghuram Rajan took over as the new RBI chief amid hopes of action plans even though the underlying macro economic fundamentals continue to get worse, traders commented.
