Sensex snaps 2-day rally; falls 114 pts on funds selling

Written by: Pti
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Mumbai, Jan 19 (PTI) The BSE benchmark Sensex todayclosed lower by nearly 114 points after a choppy trade asinvestors turned cautious ahead of the Cabinet reshuffle amidrate hike concerns.

The 30-share Sensex fell by 113.73 to close at 18,978.32points, ending the two-day rally in which the index had gainedover 230 points.

The gauge shuttled between 19,167.06 points and 18,898.56points level during the session. It dropped 4.2 per cent lastweek, ending 10 per cent below the November 5 record.

In similar fashion, the broad-based National StockExchange index Nifty lost 33 points to 5,691.05, after movingbetween 5,747.65 and 5,662.55.

Brokers said trading sentiment turned bearish on concernrising prices would erode profit growth and prompt the RBI toraise interest rates at a meeting next week.

They said foreign funds sold heavy-weight stocks andshifted funds to other emerging equity markets.

The foreign funds were net sellers for the ninth straightday on January 17, the longest stretch of withdrawals sinceMay, the official data revealed.

The general investors becoming more cautious ahead of theCabinet reshuffle this evening, was another dampeningfactor for the market, brokers said.

The capital goods sector index was worst performer bylosing 1.20 per cent to 13,517.77 as the stocks of Larsen andToubro, the largest engineering company fell to a seven-monthlow by Rs Rs 31.50 to Rs 1,651.95 amid concerns over slowingorders.

The information technology sector was second biggestloser by falling 1.18 per cent to 6,641.65 as InfosysTechnologies led a decline in software stocks, halting twodays of gains. Infosys fell by Rs 66.15 to Rs 3,252.

As the selling pressure spread over a wide-front, themidcap sector index fell by 0.15 per cent to 7,166.31 andsmallcap index by 0.09 per cent to 8,901.67.

However, a rise in metal, realty, auto and bankingsectors capped the losses.

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