Shocking inflation rates trip markets; Sensex down

Mumbai, Mar 9: The 30-scrip Sensex today plunged by 164.34 points on the Bombay Stock Exchange and ended in the red at 12,884.99 from its previous close of 13,049.35 points, after official data revealed that inflation has once again firmed up to 6.10 per cent for the week ended February 24, against 6.05 per cent, a week back.

''This unexpected growth in inflation is despite the decline in prices of essential food items, since some manufactured products like cement have became dearer. This volatility will continue for the next three-four weeks. In the short term, the markets are going to be very bumpy and range-bound,'' market analysts explained.

''However, this is the right time to pick good stocks, since the economy is growing at a robust pace and captial markets are bound to appreciate in the long term,'' a certified investment advisor reasoned.

Among the broader markets, the Nifty Index of the NSE today tanked by 43.65 points to close in the red at 3718.00 from its previous close of 3761.65 points.

Cement pivotals ACC, Grasim and Gujarat Ambuja Cements were down sharply after the manufacturers agreed not to raise prices for one year, today onwards. The decision of cement makers was announced by Commerce Minister Kamal Nath after a meeting with industry captains The government's close vigil on cement prices had already spooked cement scrips over the past one and a half months. Nath had said yesterday that the government may consider banning cement exports if that would help cool prices, sending cement shares sliding.

Shares in third-biggest cement maker Gujarat Ambuja Cements (GACL) declined by 2.61 per cent to Rs 109.95, while larger rival ACC fell by 6.30 per cent to Rs 781.

Grasim tumbled by 7.43 per cent to Rs 2069.15 on a volume of 2.91 lakh shares.

Index heavyweight Reliance Industries (RIL) was down by 2 per cent to Rs 1308.05, on a volume of 9.83 lakh shares. PSU engineering major Bhel slipped by 3.70 per cent to Rs 2095. On the other hand, Tata Steel gained 0.97 per cent to Rs 431.55, after it acquired 100 per cent equity stake in Rawmet Industries Private (Rawmet), for an enterprise value of Rs 101 crore.

Mphasis rose by 2 per cent to Rs 265.50, after unconfirmed rumours that EDS may hike the open offer price for shareholders.

Meanwhile, Asian and European markets were trading mixed.

The Nikkei share average gained 0.43 per cent, to close up by 73.73 points, at 17,164.04, after booking its largest daily percentage gain since October in the previous session.

Hang Seng was down 0.21 per cent to 19,134.88.

The Dow closed up 68.25 points, or 0.56 per cent, at 12,260.70.

The Standard&Poor's 500 index climbed 9.92 points, or 0.71 per cent, to 1,401.89, and the Nasdaq composite index advanced 13.09 points, or 0.55 per cent, to 2,387.73.

Oil prices were nearly flat in Asian trading today, as market participants looked for a trading cue from US employment data due later in the day. Light, sweet crude for April delivery dropped 10 cents to USD 61.54 a barrel in electronic trading on the New York Mercantile Exchange midmorning in Singapore.

UNI