Indian markets close lower on global turmoil, rate hike fears (Roundup)

August 12th, 2011 - 8:26 pm ICT by IANS  

Sensex Mumbai, Aug 12 (IANS) Indian equities markets closed lower as selling pressure built up in the afternoon session amid fears of a recession in major global economies and another hike by the Reserve Bank of India.

The 30-scrip sensitive index (Sensex) of the BSE, which opened at 17,246.88 points, closed at 16,839.63 points, down 219.77 points or 1.29 percent compared to its previous close at 17,059.4 points.

The 50-scrip S&P; CNX Nifty of the National Stock Exchange too ended lower at 5,072.95 points, down 1.27 percent.

The markets have been badly this week over the US sovereign debt rating downgrade and fears of a double dip recession in the largest economy of the world.

Latest data released showed industrial output growing by a healthy 8.8 percent, which sparked fears that the RBI may hike rates again in September to control rising inflation.

“For the time being it will strengthen the case for further tightening by the RBI. Food inflation has again firmed as per the latest data. Given that demand has not moderated to the extent desired by the RBI, markets would be concerned that another rate hike could not be ruled out,” said Sanjeev Zarbade, vice president with Kotak Securities.

Mid-to-smaller stocks too gave up early gains. The BSE midcap index closed 0.46 percent down and the BSE smallcap index ended 0.44 percent lower.

IT, telecom and banking stocks topped the losers list. All 13 sectoral indices on the BSE closed in the red.

The market breadth at the BSE was negative with 1,257 stocks moving up, compared to 1,569 on the decline and 124 remaining unchanged.

According to data available with the Securities and Exchange Board of India, foreign institutional investors bought stocks worth $20.73 million Friday.

Among main gainers on the Sensex were: Jindal Steel, up 2.57 percent at Rs.524.70; M&M;, up 1.82 percent at Rs.740.30; Hero MotoCorp, up 1.79 percent at Rs.1,890.80 and ONGC, up 0.76 percent at Rs.279.30.

Main losers included: Tata Motors, down 5.26 percent at Rs.801.10; Hindalco, down 4.04 percent at Rs.150.85; Jaiprakash Associates, down 3.28 percent at Rs.61.95 and Tata Power, down 3.12 percent at Rs.1,088.35.

Other major Asian markets closed on a dull note.

The benchmark Japanese Nikkei was closed 0.2 percent lower at 8,963.72 points, while the Chinese Shanghai Composite index nudged up 0.45 percent to 2,593.17 points.

Hong Kong’s Hang Seng too closed dull at 19,620.01 points.

European stocks moved up sharply in a relief rally. Also short selling restriction of financial stocks in some Euro zone countries helped buying interest in banking stocks.

The FTSE 100 of UK was ruling 2.26 percent higher at 5,279.51 points, while the German DAX was up 2.96 percent at 5,969.07 points.

The French CAC 40 was up 2.73 percent at 3,174.09 points.

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