Bankex biggest sectoral loser

STOCK REPORT

Selling pressure from FIIs, high inflation data and rising interest rates today triggered the 389 points slide on the BSE Sensex, just four days ahead of the Union Budget.

Across the board selling led to the Bombay Stock Exchange (BSE) benchmark index, Sensex, dropping to 13,568.08 points, an intra-day fall of 503.19 points from its opening of 14,071.27 before some pull back.

The 30-share Sensex finally settled below 14,000 mark at 13,632 points registering a fall of 2.77 per cent. The NSE Nifty also lost 101 points closing at 3,938 points.

"Foreign Institutional Investors (FIIs) who had built huge portfolios hedged their positions ahead of the Budget by selling today. High interest rates combined with today's inflation figures of 6.63 per cent have also contributed to the fall," Angel Broking's CMD, Dinesh Thakkar, said.

Among the sectoral indices, the BSE Bankex fell 3.42 per cent, FMCG 3.35 per cent and Technology 3.22 per cent. The BSE Smallcap index fell by 3.75 per cent.

"Negative budget expectations led to a selling spree as a segment of the market is expecting a tighter tax regime," Mahesh Thakkar, a trader and investor, said. However, another market watcher said that there was no negative expectation from the budget but political uncertainty was weighing on the markets.

Bluechip cement stocks suffered heavy losses with Grasim Industries losing 5.99 per cent and ACC 4.97 per cent. Among banks, ICICI Bank lost 4.28 per cent, HDFC Bank 2.54 per cent, SBI 1.97 per cent and Punjab National Bank 2.96 per cent.

FMCG major ITC fell 4.57 per cent expecting further taxation on cigarettes in the Budget while Hindustan Lever fell 2.42 per cent.

Among technology stocks, Infosys fell 2.24 per cent to Rs 2,237.35, Bharti fell 5.72 per cent to Rs 756 and Satyam Computer fell 2.32 per cent to Rs 448.75.

The Union Budget which will be presented on February 28 by Finance Minister P Chidamabaram is likely to "focus on infrastructure investments to make growth sustainable, address issues related to growth in agriculture, measures to tackle inflation, increasing spend on health and education," an Edelweiss Capital pre-budget outlook said.