The BSE benchmark Sensex on Thursday recorded second biggest fall in a month by losing over 454 points on year-end selling by foreign funds in banking and realty sectors, amid rise in food inflation that could signal a possibility of interest rate hike.
The Bombay Stock Exchange benchmark Sensex, which had lost 285 points in last two trading sessions, tumbled by 454.12 points to 19,242.36, after dipping to 19,160.87 as financial and realty stocks continued to be battered. On November 16 the index fell 444 points.
The National Stock Exchange index Nifty fell by 137.20 points to 5,766.50, after touching the day’s low of 5,742.30.
Major market players pressed ‘panic’ button on reports of the deepening crisis over the 2G spectrum allocation scam and food inflation rising to 8.69 per cent from 8.60 per cent for the week ended November 27.
Already battered banking and realty segments on hike in deposit rate concerns, fell further as investors felt that food inflation might fuel overall inflation and could lead banking regulator RBI to raise interest rate for the seventh time since March.
The reports of Employees Provident Fund suspending further investment in LIC Housing Finance, further fuelled the down-trend in last one-hour trading. The LIC Housing stock tumbled by 7.26 per cent to Rs. 894.10.
Besides, foreign funds were off-loading on approaching year—ending in the absence of any positive trigger from domestic front and uncertainty in the global economies, especially European.
In the 30—BSE index components, 27 stocks declined while three others ended with gains. The consumer durable index was the biggest loser followed by realty, metal and banking.
The banking index suffered further losses by falling 3.24 per cent to 12,645.15. State Bank of India, the largest lender, slid for a sixth day to its lowest level in almost four months. HDFC, a mortgage lender, fell 1.85 per cent.
Another interest-linked Realty sector index was lower by 4.76 per cent to 2,704.95, on fears that the RBI’s policy rate changes might impact the sale of houses and developments.
The RBI is meeting on December 16.
Reliance Communications Ltd, the second—largest mobile phone operator, fell for the fifth day by losing 5.66 per cent to Rs 122.50. The CBI searched homes of former telecom minister A Raja, who is at the centre of a probe for a scam in allocating 2G spectrum. Another major phone operator Bharti Airtel fell by 2.58 per cent to Rs 338.60.
Bucking the general weakening trend, Infosy rose by Rs. 16.95 to Rs. 3,151.55, Wipro by Rs. 2.90 to Rs. 436.90 and Mphasis by Rs. one to Rs. 597.35.