Mumbai, Aug 12: Ignoring higher factory output numbers, the BSE Sensex dipped for the second day today, down 220 points, and slipped below the 17k mark to 16,839.63 on investor worries over rising interest rates, inflation, and global economic uncertainties.
Investors are worried over high interest rates that will crimp corporate profits, brokers said. SBI and ICICI Bank raised lending rates yesterday, which impacted interest sensitive stocks.
The downtrend was led by IT, teck, banking, realty, power and metal sectors. Blue-chips such as RIL, Infosys, TCS, Wipro, BHEL, SBI and HDFC Bank were all hit. IT sector suffered the most on likely economic slowdown in the US and Europe, which account for up to 85 per cent revenues of Indian's software services exporters.
Markets fell despite higher industrial growth reflected in IIP numbers for June. The growth was 8.8 per cent in June on the back of a smart recovery in the manufacturing sector and better offtake of capital goods.
The Bombay Stock Exchange 30-share index, Sensex, opened higher at 17,246.88, but declined to 16,784.56 intra-day. It finally closed at 16,839.63, down 219.77 points or 1.29 per cent. The NSE 50-share Nifty dropped by 65.35 points or 1.27 per cent to 5,072.95.
Global markets, which have been in turmoil since the downgrade of the US creditworthiness by ratings firm S&P last week, showed mixed trends.
“There is gloom in the global markets. However, India is the much better placed compare its peers on account of strong internal consumption as evident from the strong IIP numbers. The June IIP at 8.98 per cent is better than expectation,” said Parag Doctor, Associate Vice President at Equities, Motilal Oswal Securities.
“IT sector continued to bleed for yet another day, with the probability of US entering a recessionary period. Besides, banking witnessed selling pressure as high food inflation at 9.9% increased the chances of RBI going in for another round of interest rate hikes in its next monetary policy review.” said Shanu Goel, Senior Research analyst at Bonanza Portfolio.
Meanwhile, Asian stocks ended mixed today. Key indices in Hong Kong, China and Singapore rose by between 0.13 per cent and 1.94 per cent, while those in South Korea, Japan and Taiwan fell 0.20 per cent to 1.33 per cent. European stock markets rebounded after a weak start. Markets in UK, France and Germeny were trading higher by 1.75 per cent to 2.80 per cent.
Among the sectoral indices, the BSE-IT fell 2.44 per cent followed by Teck (2.24 pc), Bankex (1.63 pc), Realty (1.49 pc) and Power (1.14 pc).
Major losers from the Sensex pack were Tata Motors (5.26 pc), Hindalco Ind (4.04 pc), Jaiprakash Asso (3.28 pc), Tata Power (3.12 pc), Wipro (2.92 pc), DLF (2.76 pc), TCS (2.71 pc), Infosys ( 2.64 pc), SBI (2.53 pc), HDFC Bank (2.32 pc), Bharti Airtel (1.96 pc), BHEL (1.94 pc), HDFC (1.75 pc), Tata Steel (1.69 pc), RIL (1.63 pc), Sterlite (1.62 pc) and NTPC (1.55 pc).
However, Jindal Steel shot up by 2.57 pct, M&M 1.82 pct and Hero Motoco by 1.79 pct. Of the Sensex, pack 24 scrips ended with losses and only 6 finished with gains.
The total market breadth at BSE remained negative as 1,569 counters closed with losses, while 1,257 scrips ended with gains. However, the turnover recovered to Rs 2,691.01 crore from Rs 2,374.85 crore yesterday. PTI