Sensex ends lower on inflation concerns

The broad-based National Stock Exchange index Nifty ended 2.55 points lower at 5,320.60 points.

Brokers said trading sentiment turned weak following reports that food inflation rose for the week ended June 12. A high inflation may prompt the Reserve Bank to raise its policy rates even before the monetary policy review in July.

A weakening trend in the Asian region followed by lower opening at European markets also dampened the sentiment,brokers said.

Selling pressure was also noticed as speculators indulged in reducing their pending long positions on expiry of current month contracts in the derivatives segment,they added.

The global stock markets hurt by a downbeat assessment by the US Federal Reserve and record low US home sale raised fears about the state of the economic growth.

The Federal Reserve said that “financial conditions have become less supportive of growth.” Sales of new homes in the US declined in May to a record low as a tax credit expired and the Fed signaled Europe’s debt may harm American growth.

In 30-BSE index components,18 closed with losses. Stocks in realty,oil and gas,banks and metal suffered the most.

Tata Consultancy Services,a software-services provider,lost Rs 11.75 to Rs 775 and Wipro Ltd by Rs 3.30 to Rs 401.60.

HCL Technologies,a software services company,dropped Rs 14.55 to Rs 358.85 after about 2.4 per cent of its equity changed hands in block deal.

In the banking sector,Kotak Mahindra Bank suffered the most by losing Rs 21.05 to Rs 762.15 after reports ING Groep sold its entire holding of 10.7 million shares.