Short sales dent indices

STOCK REPORT

Having witnessed volatile trade during the day, key indices today ended off lows on short covering. Sentiment was cautious on fears the correction was not yet over, and worries over high inflation rate, dealers said.

After a breathless run-up, indices have fallen over 4 per cent since the close of Thursday. The country's headline inflation rate for the week ended January 27 was 6.58 per cent "� a 25-month high, and higher than analysts' estimates of 6.48 per cent.

"High inflation and interest rates are the negatives right now. Another worrying fact is that Monday's fall was supported by huge volumes," Ajay Padval, vice-president, Mehta Equities said.

Today, turnover on both the exchanges was Rs 14,900 crore, compared with Rs 13,200 crore on Monday. Sentiment was also hit after foreign institutional investors sold futures worth Rs 1,600 crore in the derivatives segment.

The Sensex ended at 14,090.98, down 99.72 points or 0.7 per cent from Monday. Intraday, it moved between 13,957.70 and 14,363.74. The Nifty ended at 4,044.55 or 0.3 per cent. Intraday, it moved between 3,998.30 and 4,132.70.The CNX Midcap Index was up 0.3 per cent and S&P CNX 500 Index ended up 0.1 per cent.

On the BSE, declines outnumbered advances 1.4:1. Dealers said investors were also worried that companies were overpaying for overseas acquisitions.

Hindalco Industries, which on Sunday said it will acquire US major Novelis for $6 billion, ended 3.5 per cent lower at Rs 144.

Ratings agency Crisil has placed Hindalco's long-term rating of AAA on 'Rating Watch with Negative Implications', saying the company's move to fund the buy will have an adverse impact on its capital structure.

The proposed acquisition cost is significantly larger than the company's net worth of about Rs 9,500 crore as in March 2006, Crisil said. Tata Steel was down 3 per cent at Rs 432.