Sensex tumbles 546 pts on rising oil prices and inflation

Mumbai, Feb 24 (PTI) The BSE benchmark Sensex todayplunged over 618 points before recovering a little to close at17,632.41, on all-round selling as investors dumped stocks onworries over rising oil prices, inflation and interest rates.

Sensex ended the day with a loss of about 546 points --steepest single day fall in 18 months.

Weak global cues because of political turmoil in theMiddle East and nearby region impacting oil supplies, as wellas expiry of monthly derivatives contracts, worsened thetrading sentiment.

The Bombay Stock Exchange benchmark index Sensex, whichhad lost over 260 points in last two trading sessions, rolleddown further by 545.92 points to close at 17,632.41.

It touched the day''s low of 17,559.70. The gauge hassuffered such a whopping fall after August 2009.

In similar fashion, the broad- based National StockExchange index Nifty broke two crucial levels of 5,400 and5,300 mark level to close with a hefty loss of 174.65 to5,262.70, after touching the day''s low of 5,242.50.

The melting stocks received a further jolt, followingreports of some big-wigs coming under the scanner ofinvestigating agency in the 2G spectrum allocation scam.

Food inflation rose to 11.49 per cent for the week endedFebruary 12, from 11.05 per cent the previous week.

The gauge has lost 8.2 per cent since the RBI hikedinterest rates for the seventh time on January 25 and revisedupwards its inflation estimate.

Brokers said a rise in food inflation and surging globalcrude oil prices raised concerns that the Reserve Bank ofIndia might soon jack up interest rate for eighth time.

They said unrest in Libya and the Middle East, theleading oil suppliers might hamper global economic growth. Themarkets might be in jittery mood until the presentation of theUnion Budget next week, they added.

The financial stocks suffered the most on fears thatrising interest rates might reduce demand for loans. Thebanking index dropped by 3.97 per cent to 11,616.59 followedby consumer durable by 3.89 per cent to 5,601.78.

The heavy machinery stocks were down as any slow down inthe economic growth would directly effect the sector. Thesegment index dropped by 3.77 per cent to 12,386.74.

The auto sector was battered on both counts -- shootingoil prices as well as interest rate hikes. The auto sectorindex fell by 3.52 per cent to 8,189.39 as Tata Motors,Mahindra and Mahindra and Hero Honda fell sharply.

With the selling pressure spreading over a wide-front,midcap sector index dropped by 2.91 per cent to 6,367.79 andsmallcap index by 2.77 per cent to 7,814.04.

Please Wait while comments are loading...