Markets end weaker; Sensex down by 113.79 points

Mumbai, May 8: The Sensex today plunged by 113.79 points to settle in the red on the Bombay Stock Exchange at 13,765.46 due to lack of buying support from investors ahead of major local and global events, scheduled later this week, and southward-bound Asian and European markets.

After opening higher at 13,886.00, it touched a high of 13,956.40 and a low of 13,741.24 during intr-day trade.

Among the broader markets, the Nifty Index also tanked by 34.15 points and settled in negative territory on the National Stock Exchange (NSE) at 4,077 from its previous close of 4,111.15 points.

At the premier BSE, the market breadth was weak, as 1,673 shares declined and only 891 shares rose. Since 72 shares were unchanged, losers outpaced gainers by a ratio of 1.87:1, market analysts noted.

Union Finance minister P Chidambaram today said that steps taken by the Central Bank and the Government will help moderate inflation.

He said the current high rate of inflation has been triggered by hardening of commodity prices, particularly of metals and crude oil, supply-demand mismatch first in sugar, then in wheat and now in pulses, increase in money supply due to capital inflow and increase in demand as a result of rise in public expenditure.

The long-term solution to bring down inflation is to correct the supply-demand mismatch created mainly due to stagnation in production of wheat, paddy and pulses, he said.

Market analyst are of the view that the seventh and final phase of polls in Uttar Pradesh today is a significant event for the markets, as the results of the elections, due on May 11, will determine the future fiscal policy of the Government.

European shares opened on a subdued note. Key benchmark indices in London, Germany and France were down 0.5 to 0.9 per cent. Asian stocks gave up early gains today, as nervous investors were worried whether a global rally would run out of steam. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were down 0.07 to 1.1 per cent.

The Dow closed at a record high yesterday, for the fifth day in a row, buoyed by Alcoa's USD 27 billion bid for Alcan. Alcoa, the world's largest aluminum company, pushed the Dow and the S&P 500 higher with a gain of 8 per cent, leading the latest round of takeover deals that have lifted the market in recent months.

The Dow gained 48.35 points, or 0.36 per cent, to end at a record of 13,312.97. Earlier, the Dow also hit an all-time intraday high of 13,317.69. The Standard&Poor's 500 Index advanced 3.86 points, or 0.26 per cent, to finish at 1,509.48, off a fresh 52-week high at 1,511.00. But the Nasdaq Composite Index dipped 1.20 points, or 0.05 per cent, to close at 2,570.95. Earlier, the Nasdaq also reached a new 52-week high at 2,580.06.

A spate of merger and acquisition activity, as well as increasingly eye-popping takeover bids have helped propel many global indices to record highs, supporting the view that the bull market has to run further. But economic news expected later in the week could inject some volatility into the global markets, with interest-rate decisions due in the euro zone, Britain and the United States. While no one expects an interest rate move by the US Federal Reserve, when it meets on Wednesday, investors are keenly awaiting the central bank's latest assessment of the world's biggest economy.

UNI