Sensex trips 40 pts, washes out early gains

The benchmark BSE Sensex today bounced back by over 350 points before succumbing to heavy selling to quote 40 points down at 26,934.58 at 1100 hours, mainly due to profit-boooking at realty, metal, power, IT and refinery counters.
This is despite a fall in retail inflation and firm Asian cues.
Heavy off-loading by foreign funds was the main reason behind the weakness in local stocks.
Initially, buoyed by buying in interest rates-related stocks from banking and auto sectors on hopes of a rate cut by RBI on a fall in retail inflation, the 30-share gauge resumed past 27k mark at 27,023.71 and rallied further to a high of 27,299.80, a rise of over 350 points.

Firm Asian cues ahead of China's economic data due later in the day on hopes of a further stimulus in the world's second-largest economy also helped the local bourses to surge.
However, a sudden gust of heavy sell-off after 1045 hours pulled it down to a low of 26,800.33 before being quoted at 26,934.58 at 1100 hours, down 0.15 per cent from its previous close.

The 50-issue CNX Nifty, which was up by 128 points in early trade, was also quoting down by 9.60 points, or 0.12 pct, at 8,117.35 at 1100 hours.
Retail inflation based on the Consumer Price Index (CPI) in April softened further and fell to a 4-month low of 4.87 per cent from 5.25 per cent (revised) in March 2015.

However, the Index of Industrial Production (IIP) grew at a 5-month low of 2.1 per cent in March from 4.86 per cent (revised) for February.
In Asia, most of the markets were trading higher between a high of 0.63 pct and a low of 0.09 pct.