MUMBAI, MAY 9:Hit by a series of bad news on the domestic and global fronts, Dalal Street lost nearly 2 per cent on heavy unloading and short selling today. As inflation surged to a 42-month high, global markets declined and crude oil hit yet another record high above $126 a barrel, the Bombay Stock Exchange’s (BSE) benchmark 30-share Sensitive Index (Sensex) lost 344 points to close at 16,737.07. According to dealers, high inflation is bad news for the market and the corporate sector. With inflation rising marginally to 7.61 per cent, the government hinted at more measures to check prices, making investors nervous.

“The markets started with a negative bias, as all the Asian markets traded weak today. Low gross refining margin in Singapore dragged down all stand-alone refinery stocks. Higher inflation spooked the market further. Crude prices, which touched $126 and the fall in the rupee, added to the weakness,” said Religare Securities Ltd president (equity) Amitabh Chakraborty. Oil & gas, realty and the banking sector lost the most due to concerns about interest rates and crude prices.

Investors were apprehensive that the government would arm-twist companies to cut prices to tame inflation. “The government has already indicated that it will take more measures to curb inflation. This could impact corporate sector profits. Besides, high oil prices will hit government finances and consumers hard,” said BSE dealer pawan Dharnidharka.

The European markets, which open after the Indian markets, were trading sharply lower today.

Ads By Google