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| Edited By: |Source: PTI |Updated: Mar 17, 2018, 04:40 AM IST
The Bombay Stock Exchange benchmark Sensex today closed lower by 48 points on profit-selling triggered by fears of a rate hike by the RBI in view of rising inflation, amid poor European cues.
In early trade, the BSE's 30-share index surged to its highest level in 29 months on the back of hectic buying in realty and banking shares.
It was, however, unable to hold on to the gains after the news of higher inflation trickled in and finished lower by 47.74 points, or 0.27 per cent, at 17,938.16.
The fall came after four days of sustained gains during which it has tested the 18,000-level.
Brokers said investors feared the Reserve Bank, in its upcoming monetary policy review, will hike policy rates for the second time this month in view of high inflation, which remained in double digits in June at 10.55 per cent.
"Inflation keeps the pressure on RBI to increase key rates in its July policy meet. We believe that the inflation will continue to be the biggest worry for the government," IIFL Pvt Wealth Management Senior VP Shishir Bajpai said.
Analysts said selling pressure further intensified after European stocks turned negative. IT stocks, which were battered after poor Infosys numbers, took another hit with European bourses showing negative cues. Metal, technology and oil & gas shares also got a severe beating.
Infosys was down 1.28 per cent, taking the total loss in two days to over 5 per cent. Fellow IT stock TCS lost 0.03 per cent and Wipro 1.89 per cent.
Reliance Industries, which carries the maximum weight in the Sensex, declined 0.53 per cent to Rs 1,069.05. State-run ONGC, too, lost 1.37 per cent.
ICICI Bank fell nearly 1 per cent over worries about a second rate hike by the Reserve Bank of India this month after headline inflation further accelerated in May.
"Though the market had ignored some negative developments in the past, a correction was due. The markets were unable to maintain the gain after a fall in IIP data, disappointing Infy results and higher inflation," SMC Global VP Rajesh Jain said.
Even finance minister Pranab Mukherjee's confidence that prices would moderate by the end of the kharif season and inflation will come down to 5-6 per cent by the year-end did not help improve the trading sentiment.
In the Sensex components, 22 stocks ended in the red, while six bucked the trend and closed higher.
Except ICICI Bank, other frontline banking stocks registered gains and ended in the green, helping the Sensex to cap the loss. SBI rose 1.50 per cent and HDFC Bank 1.11 per cent.
The country's largest mortgage lender, HDFC, which was the top gainer in the Sensex pack in early trade, ended 0.47 per cent higher after it posted a 23 per cent growth in net profit to Rs 564.92 crore for the June quarter.
Marketmen said while HDFC's profit was in line with estimates, the top-line was slightly below their forecast.
Engineering major L&T surged 2.4 per cent and was the top gainer in the BSE-30 pack after the firm emerged as the lowest bidder for the Rs 12,100 crore Hyderabad Metro Rail project. L&T also got a Rs 376 crore contract from ONGC for offshore construction work.
On the global front, Asian bourses ended higher, whereas Europe was trading in the red at mid-session.
