Sensex crashes by 170.69 pts ahead of Budget

Mumbai, Feb 27 (UNI) Ahead of the Union Budget, the Sensex today plunged by a whopping 170.69 points to close at 13,478.83 on the Bombay Stock Exchange following government's admission that inflation could persist this year.

Finance Minister P Chidambaram, in his economic survey presented in Parliament today, admitted that in the current year pressure on inflation could persist because of a mismatch in supply and demand of some primary articles and firm international prices.

The survey lists the pressure points on prices. Foremost in this regard are the supply side constraints, particularly of agricultural commodities.

On the other hand, market analysts point out that a week prior to the Budget has always been sluggish.

''The week succeeding the Budget witnesses a turnaround for the last six years and markets have been positive, on five out of six ocassions. The post Budget rally is generally led by capital goods, metal and banking indices,'' a leading broker said.

Besides defeat of the Congress in two states and weakness in Asian markets made the general sentiment shaky, he added.

However, select stocks edged up in an otherwise weak market, as investors bet on sector specific budget sops.

Volatility kept marketmen on tenterhooks for the second day in a row today as the barometer Sensex swung 294.85 points, between a low of 13,408.56 and a high of 13,703.41.

The BSE 30 scrips of sensitive index resumed high at 13,703.41 points. Later, it recorded the day's high at 13,703.41 and a low at 13,408.56 points in intra day trades.

The BSE BANKEX and IT indices also went down by 107.63 and 73.02 points and finished at 6694.82 for BANKEX index and for IT index at 5172.40 points, followed by METAL index by 72.56 and quoted at 8927.98 points, CG index by 67.18 and touched 9145.74 points, AUTO index by 60.65 and closed at 5305.07 points, CD index by 50.94 and quoted at 3639.10 , PSU index by 47.69 and closed at 5864.16 points, OIL&GAS indexc by 46.94 and finished at 6483.67 points and FMCG index by 34.88 and closed at 1777.38 points.

Meanwhile, the S&P CNX Nifty index of NSE also declined by 50 points and closed at a low of 3893.90 points, brokers said.

Stocks in China, which topped 3,000 points for the first time on Monday, plunged almost 9 per cent on Tuesday, their biggest drop in 10 years. China Minsheng Banking Corp led the decline in moneylenders, as the central bank raised the reserve ratio this week for the fifth time in eight months, to cut lendable resources for banks.

Stocks in South Korea, Australia and Singapore fell from record highs on concerns about a stronger oil. Shares in Japan also dropped.

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