Stock markets turned edgy with the benchmark Sensex closing with a marginal 1.34=point drop after a volatile session, as an impressive industrial growth coupled with high inflation rate fuelled fear of imminent hike in lending rates.

The Bombay Stock Exchange’s 30-share index settled at the 7-week high level of 17,166.62 points, down 0.01 per cent or 1.34 points.

Despite the decline, the market managed to scale its highest level since January 20 as stocks rallied in early trade on expectations of good industrial production figures.

In the intra-day trade, it rose to as high as 17,244.54 a new 52-week peak, but pared some of the gains on profit booking in blue-chips like HDFC Bank, Infosys, HUL and L&T.

The National Stock Exchange’s 50-share Nifty index closed 0.07 per cent or four points higher at 5,137 points.

“The good IIP figure failed to boost market sentiment and pulled it down from intra-day high level. There is very low volume which is not supporting the gains at higher end,” Unicon Financial Intermediaries CEO G Nagpal said.

This is the third straight week of gain posted by the key index. The market traded in a narrow range but managed to move 172.13 points up this week.

India’s factory production grew 16.7 per cent in January on robust manufacturing activity, lending optimism of a faster economic recovery, which analysts said would prompt the central bank to adopt monetary tightening.

Keywords: stock marketsensexBSENSEHDFC

More In: Business | Markets