Sensex falls by 4.22 pct loss as interest worries continue

All indices ended in red due to heavy selling pressure from investors.

Expectation of hike in interest rates,persistent heavy selling pressure from Foreign funds amid disappointing Quarter three results from IT bellwether Infosys Technologies pulled down the BSE benchmark Sensex by another 831 points or 4.22 per cent.

All indices ended in red due to heavy selling pressure from investors. Capital Goods,Realty,Banking,Oil&Gas,PSU,Power sectors were the major contributors to the sensex fall.

“The inflation rate for December has turned out to be much higher than what was originally expected… Given the present situation,perhaps some tightening on the part of the Reserve Bank may be required,” Prime Minister’s Economic Advisory Council Chairman C Rangarajan said.

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The overall inflation for December,measured on the basis of wholesale prices,increased to 8.43 per cent in December,from 7.48 per cent in November.

Foreign Institutional Investors (FIIs) continued their selling spree during the week.

Banking pivotals declined on rate hike worries. India’s second largest private sector bank by market capitalisation HDFC Bank tumbled 9.49 per cent. India’s largest commercial bank by branch network State Bank of India fell 3.75 per cent and largest private sector bank by market capitalisation ICICI

Bank fell 3.57 per cent.

Infosys tumbled almost 5 per cent after the company’s Q3 December 2010 earnings lagged market expectations and as its earnings and revenue outlook for Q4 Mch 2011 disappointed investors.

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The NSE 50-share Nifty also dropped by 250.05 points or 4.23 per cent to finish at 5,654.55.

Among the 30 Sensex shares,27 declined and rest rose.

Among the major indices,the BSE-Capital Goods fell by 5.88 per cent followed by the BSE-Realty 5.30 per cent,the Bankex by 5.29 per cent,the BSE-Oil&Gas by 5.14 per cent,the BSE-PSU by 4.09 per cent and the BSE-Power by 4.03 per cent.

Small-cap and mid-cap indices also declined sharply by 3.94 per cent and 3.31 per cent,respectively.

Infrastructure developer Jaiprakash Associates was the second biggest Sensex loser. The stock tumbled 7.87 per cent.

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Index heavyweight Reliance Industries (RIL) fell 5.99 per cent. India’s largest steel maker by sales Tata Steel fell 5.93 per cent. Other losers from sensex pack were L&T (7.49 per cent),Jindal steel (6.68 per cent),HDFC (6.20 per cent) ,Bajaj Auto (5.32 per cent),NTPC (5.13 per cent),Cipla (4.85 per cent),BHEL (4.16 per cent),Reliance Infra (3.43 per cent) and HUL (3.09 per cent).

The total turnover at BSE and NSE was Rs 17,637.52 crore and Rs 70,115.03 cr respectively as compared to the last weekend’s level of Rs 18,937.46 crore and Rs 66,037.47 crore.