Sensex dips below crucial 19k level on interest rate concerns

Posted By: Pti
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Mumbai, Jan 14 (PTI) The BSE benchmark Sensex todaydipped below the crucial 19,000 level for the first time infour months on heavy sell-off by funds on concerns thatinflation will erode profit growth and prompt RBI to raiseinterest rates this month.

The Bombay Stock Exchange benchmark Sensex tumbled by322.38 points to 18,860.44, a level last seen on September 9,2010.

The gauge touched the day''s high of 19,447.82 in volatiletrade.

Similarly, the broad-based National Stock Exchange indexNifty plunged 97.35 points at 5,654.55 as rate-sensitiverealty, banking and auto stocks suffered losses on concernsthat the increasing inflation would force the central bank tohike interest rate.

A weak trend in the Asian region and lower opening inEurope further weighed heavy on the domestic front.

Inflation shot up to 8.43 per cent in December, from 7.48per cent in the previous month, as prices of certain foodand non-food items continued to show an upward trend.

With inflation showing no signs of moderation, it iswidely expected that RBI will raise the key policy ratesduring its quarterly monetary policy review on January 25.

The realty index fell the most by 2.77 per centto 2,524.31 followed by bankex which lost 2.62 per cent to11,850.60.

The metal index fell by 2.44 per cent to 16,371.60 asprofits of Steel Authority of India, the country''s second-largest steel producer fell to its lowest level in more than14 months on rising input costs leading to a 34 per cent slidein its quarterly net income.

The auto index fell by 2.31 per cent to 9,259.02 asscrips of Tata Motors, the biggest truckmaker, dropped for thefirst time in three days by losing Rs 57.05 to Rs 1,178.60.

The midcap index fell by 1.18 per cent to 7,223.78 andsmallcap index by 1.04 per cent to 8,993.84.

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