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Sensex Falls 148 Pts On Inflation Concerns, Weak Global Cues

Mumbai, Oct 20: The BSE Sensex tumbled 340 points before recovering some ground to close at 16,936.89 today— still down 148 points—as spurt in food inflation ignited investor concerns that interest rates may go up

PTI [ Updated: October 20, 2011 17:42 IST ]
sensex falls 148 pts on inflation concerns weak global cues
sensex falls 148 pts on inflation concerns weak global cues

Mumbai, Oct 20: The BSE Sensex tumbled 340 points before recovering some ground to close at 16,936.89 today— still down 148 points—as spurt in food inflation ignited investor concerns that interest rates may go up further, and cues from global markets remained weak.


Rate sensitive sectors - realty, auto, banking and consumer durables - bore the brunt of selling as food inflation shot up to 10.6 per cent for week ended October 8 from 9.32 per cent in the previous week.

Analysts said it will add to inflationary pressures, prompting the Reserve Bank to further hike lending rate in the second quarterly review of the monetary policy on October 25.

The BSE 30-share Sensex opened 175 points down at 16,911.85 on the bearish Asian trends, following fall on Wall Street yesterday on signs of a split between France and Germany over plan to solve the euro-zone debt problems at the forthcoming weekend summit.

It fell further as food inflation figures came out, to 16,744.99, a fall of over 340 points.

The NSE 50-issue Nifty also dropped by 47.25 points or 0.92 per cent to 5,091.90.

However, it rebounded at the fag-end on short-coverings, ahead of the expiry of derivatives contract on October 25. It closed at 16,936.89 -- down 148.45 points or 0.87 per cent.  Yesterday, it had gained by 337.05 points or 2.01 per cent.

“Currently, economic growth challenge, Europe and quarterly earnings results are dominating the market movements,” Milan Bavishi Head Research Inventure Growth and Securities said.

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