Mumbai, Jan 27 (PTI) The BSE benchmark Sensex today fellover 285 points to 18,684.43 amid rising food inflation andfears of further hike in interest rates, as investors adjustedpositions on the last day of monthly derivatives contracts.
The Bombay Stock Exchange benchmark index Sensex dropped285.02 points following reports that the food inflation hasmoved up marginally to 15.57 per cent for the week endedJanuary 15, from 15.52 per cent in the previous week.
The gauge had lost 182 points in the previous session,after the Reserve Bank of India had increased key rates forthe seventh time since last March, revising upwards inflationforecast to 7 per cent for this fiscal end from 5.5 per cent.
Besides, investors and funds unwinding their pendingpositions on the last day of the current month''s settlement inthe derivatives segment also effected the trading sentiment.
After a higher opening, the Sensex remained volatilethroughout the session, touching a high of 19,086.69 and a lowof 18,656.05.
The broad-based National Stock Exchange index Niftydipped below 5,600 points level before closing 83.10 pointsdown to 5,604.30, with stocks of banking and interestrelated sectors suffering the most.
Brokers said the initial gains got erased as overseasinvestors felt that the near-term outlook of the economicgrowth looked far from promising, and tried to find betterprospects elsewhere.
They said further rise in food inflation this weekmatching with the RBI forecast raised concerns among investorsof a further hike in policy rates to tame overall price rise.
In 30 BSE benchmark components, 28 stocks fell, whileTata Consultancy Services and Tata Motors ended with gains.
The two most-heaviest, with 23 per cent weightage on theindex, fell -- Reliance Industries dropped by Rs 15.55 to Rs943 and Infosys Technologies by Rs 58.90 to 3,195.20.
With the selling pressure spreading over a wide-front,the midcap index lost 1.88 per cent to 7,087.16 and smallcapindex by 1.35 per cent to 8,864.23.