MUMBAI: High inflation and a rush of profit selling snapped an early rally in the stock market on Friday.
The Sensex, which had gained about 90 points at open, fell back to close 113.45 points lower at 12430.40, after touching a high of 12638.78 and a low of 12316.10.
Worried that inflation, which surged to 6.46 per cent during the week ended March 3 as against 6.10 in the previous week, could lead to rise in interest rates, the investing fraternity went on a selling spree, dealers said.
Marketmen said the rise in inflation data might jack up measures from the government and the Reserve Bank by raising interest rate, which could hurt earnings growth. The other cause for concern was the sustained selling by foreign institutional investors in the last few days, besides negative global factors, they added. The S&P CNX Nifty also dipped by 35.05 points or 0.96 per cent to finish at 3608.55 from 3643.60. FIIs turned net sellers.
Depicting a fall in capital goods shares, the BSE-CG index slumped by 222.69 points or 2.60 per cent to 8334.96. Oil and gas index beat the bearish trend to close in the positive terrain owing to lower global crude oil prices. PTI