Markets fell for the second day in a row today to close below the psychologically important 17,000-mark after five days, as the sentiment remained down with investors fearing that a rate hike is imminent now.
The benchmark Sensex on the Bombay Stock Exchange rose by over 100 points in early trade on reports that higher advance tax payments by India Inc indicated robust third quarter performance.
However, intense selling emerged soon and the 30-share barometer settled the day with a hefty loss of 220.39 points or 1.29 per cent. Market had closed lower by a moderate 21 point yesterday.
ADVERTISEMENT
Marketmen attributed selling to fears that the Reserve Bank would signal lenders to hike interest rate by tightening its monetary stance. Inflation rising to a worrying 4.78 per cent for November augmented rate hike fears, they added.
Brokers said despite reported higher advance tax payments by corporates in the third quarter, investors booked profits at current levels as dollar surged against its major rivals.
All the interest rate sensitive counters - banking, auto and realty - were battered. Country’s two biggest banks SBI and the ICICI Bank lost around 3 per cent each. HDFC Bank also closed down by 2.27 per cent.
ADVERTISEMENT
Auto major Tata Motors took a hit of 3.18 per cent. RCOM was the biggest Sensex loser at 3.73 per cent.
Blue-chip RIL, which has maximum weight on Sensex, declined 1.41 per cent, contributing the sharp fall in index.