Sensex crashes by 149.52 pts, closes at 14,253.38

Mumbai, Feb 20: The Sensex today plunged by 149.52 points and finished in the red at 14,253.38 on the Bombay Stock Exchange on sustained heavy bull liquidation by local operators over fears of further rise in interest rates.

''Concerns arising from a hike in domestic interest rates, caution ahead of the Bank of Japan's policy meeting and worries that the government may raise short-term capital gains tax in the Union Budget 2007-08 pulled the market down,'' market analysts opined.

Banking, cement, auto and telecom stocks were among those that edged lower.

A key near-term trigger for global markets is the Bank of Japan's two-day policy meeting which will end tomorrow. Analysts are divided whether Japan's central bank will lift rates to a decade-high of 0.5 per cent from 0.25 per cent. Hedge funds, who benefitted from low rates in Japan, may resort to selling equities following any rate hike, or a signal of a rate hike.

Meanwhile, there are also concerns in India that the government may raise short-term capital gains tax on sale of shares from the current 10 per cent in the budget.

February 2007 derivatives contracts expire this Thursday. The rollover in Nifty contracts, till end of Monday's trading, was 36 per cent. The overall rollover in individual stock futures was about 25 per cent. The rollover was strong, at 50 - 60 per cent, in Reliance Petroleum, Satyam Computers, Balrampur Chini Mills and Bajaj Hindustan.

The market-breadth was quite weak. For 1,908 shares that declined on BSE, 707 rose. Just 58 shares were unchanged.

The Sensex's closed low at 14,253.38, a fall of 149.52 points.

however, it looked up at 14,449.23 and later recorded the day's high at 14,466.76 points and a low at 14,230.47 points.

The BSE CG and BANKEX indices also came down steeply by 142.69 and 102.86 points, to settle at 9503.10 and 7186.24 points respectively. Similarly, SML CAP index declined by 102.86 and closed at 7214.73 points, followed by PSU index by 93.21 and quoted at 6115.84 points, AUTO index by 84.05 and touched at 5537.42 points, MID CAP index by 73.05 and closed at 5877.90 points and OIL&GAS index by 49.98 and closed at 6,683.43 points.

Meanwhile, the S&P CNX Nifty index of NSE closed low at 4,106.95, a drop of 57.60 points compared to 4164.55 points on the previous day.

The Index opened flat at 4164.85 and later it registered the day's high at 4175.45 points and a low at 4099.55 points.

A fall in ONGC weighed on the Nifty. ONGC has a much larger weightage in the Nifty compared to that in the Sensex. Nifty February futures were at 4,115.55, compared to the spot Nifty closing of 4,106.95.

The BSE clocked a turnover of Rs 3871 crore.

Shares of the state-run SBI today dropped by 2.4 per cent to Rs 1103. The State Bank of India (SBI) has joined some other state-run banks in raising the benchmark prime lending rate (PLR). Interest rates on working capital loans are linked to PLR. Any rise in PLR increases borrowing cost of working capital loans for corporates.

ICICI Bank shed 0.7 per cent to Rs 971, while HDFC Bank lost 0.7 per cent to Rs 1025.35.

Housing finance major HDFC lost 2.4 per cent to Rs 1651, on concerns that rising interest rates may impact demand for housing loans.

Oil exploration major, ONGC, dropped by 3.5 per cent to Rs 873, following reports that the Directorate General of Hydrocarbons (DGH) had disallowed gas discovery in the Krishna-Godavari basin. ONGC is likely to contest DGH views, reports suggest.

Cement shares edged lower on market talk that the government might impose a ban on cement exports in the budget to check cement prices.

Grasim lost 3 per cent to Rs 2565, and Gujarat Ambuja Cements shed 2.2 per cent to Rs 129.50.

FMCG major Hindustan Lever (HLL) lost by 2.5 per cent to Rs 199.80 amid post-results' volatility. The stock had weakened to Rs 200.70 by mid-session ahead of the results, which hit the market in afternoon trade. HLL had firmed up to a high of Rs 207.85 in intra day trade. As many as 26.8 lakh shares changed hands in the counter on BSE. HLL's net profit declined 1.9 per cent in the December 2006 quarter to Rs 511 crore from Rs 521 crore in the December 2005 quarter.

Telecom shares edged lower. Reliance Communications shed 2.3 per cent to Rs 452.10, and Bharti Airtel shed 1.1 per cent to Rs 788.10.

Reliance Industries dropped by 0.3 per cent to Rs 1412.85. The stock weakened in the latter part of trading. It rose as much as 1.8 per cent, to a high of Rs 1444.80, during the session. This is a new all-time high for the stock. As per reports, global oil major, Chevron Corporation, may assist RIL in developing an exploration block in the fertile Krishna-Godavari (KG) basin.

Auto shares drifted lower. Maruti Udyog lost 2 per cent to Rs 895.20. The stock had surged in the last couple of days after the cut in retail prices of petrol and diesel. While Tata Motors lost 1.6 per cent to Rs 854, Bajaj Auto dropped 1.1% to Rs 2991, brokers added.

UNI