Fall in inflation fails to cheer up markets (Roundup)December 26th, 2008 - 6:40 pm ICT by IANS
Mumbai, Dec 26 (IANS) Despite a further ease in inflation, Indian equities markets continued their downward trend Friday, with a key index shedding about 240 points over its previous close.The sensitive index (Sensex) of the Bombay Stock Exchange (BSE) closed at 9,328.92 points, down 239.8 points or 2.51 percent from its previous close of 9,568.72 points.
Earlier in the day, government data showed that India’s annual rate of inflation dipped to 6.61 percent for the week ended Dec 13 from 6.84 percent the week before.
“Inflation has stopped being a trigger event as far as the capital markets are concerned. The market has already factored in that inflation will remain in an acceptable range and will keep coming down in the coming weeks,” said Jagannadham Thunuguntla, head of the capital markets arm and director of India’s fourth largest share brokerage firm, the Delhi-based SMC Group.
“The markets gave up profits by the middle of the day. We still have some more pain to face in the markets as investors have to recover confidence in the system,” he added.
Broader S&P CNX Nifty of the National Stock Exchange (NSE) fell 53.05 points or 1.82 percent to close at 2,863.8 points.
Market indices like the midcap index fell marginally 1.24 percent, while the smallcap index shed 1.43 percent.
Of the 13 sectoral indices on the Bombay Stock Exchange(BSE), health care was the only sector that gained Friday.
Top losers include Reliance Infra (down 6.1 percent to close at Rs.577.55), DLF (down 5.97 percent at Rs.293.95) and Infosys (down 5.33 percent at Rs.1,172).
Among gainers were Maruti Suzuki (up 1.68 percent at Rs.502.3) and Tata Power (up 0.5 percent at Rs.725.5).
While the US and European markets remained closed Thursday, Asian markets were a mixed bag with the Nikkei, a key index of the Tokyo Stock Exchange rising 1.63 percent.
However, the Hang Seng, a key index of the Hong Kong Stock Exchange fell 0.26 percent.