Weak SBI results, concern over high inflation impact
The Bombay Stock Exchange sensitive index, Sensex, on Tuesday declined by 208 points to nearly eight-week low of 18137 as investors sold banking and oil stocks after the country's largest lender SBI posted a sharp drop in fourth quarter profits and reports that government would increase subsidy burden on ONGC.
SBI net profit tumbled to Rs.20.88 crore for the fourth quarter ended March 31, 2011, from Rs.1,866.60 crore in the year-ago period due to higher provisioning for bad loans and operating expenses. The SBI stock tumbled 7.78 per cent to Rs.2,413.60.
ONGC fell 6.71 per cent to Rs.277.55 on reports that the government had increased its contribution to fuel subsidy to 38.5 per cent from 33 per cent for 2010-11. Although the move is a positive one for refiners like IOC, their stocks fell over delays in government move to raise diesel prices. Last week, the government was expected to raise diesel prices by about Rs.4 to partially reduce the subsidy burden on them.
Sensex top heavyweight and refinery major RIL also shed 2.53 per cent at Rs.920.40, pulling down the market further.
The 30-share BSE index, Sensex, initially touched a high of 18435.80 but fell back to settle at about eight-week low of 18137.35, down 207.68 points or 1.13 per cent. On Monday, it fell by 186.25 points or 1.01 per cent amid investor concerns of high inflation and further rise in interest rates, triggered by moves to revise upwards the fuel prices in line with international rates.
The NSE 50-issue index, Nifty, dropped 60.05 points or 1.09 per cent to 5438.95.
In Asian markets, key indices from Hong Kong, South Korea and Taiwan closed with slight losses. — PTI