Sensex closes at lowest in over a month; inflation hurts

By Abhishek Vishnoi

MUMBAI (Reuters) - The BSE Sensex fell for a seventh consecutive session on Wednesday to its lowest close in over a month as rate-sensitive stocks declined after higher-than-expected retail inflation data raised fears of a third rate hike this year.

India's annual consumer price inflation quickened more than expected to 10.09 percent in October from 9.84 percent in September, driven by food prices, government data showed on Tuesday.

Uncertainty about the timing of a cut in Federal Reserve stimulus and the fine print of economic reforms in China also hurt sentiment.

However, the market may find some support at lower levels due to an oversold state and a recovery in the benchmark bond after RBI Governor Raghuram Rajan said the central bank will buy 80 billion rupees of bonds through open market operations.

 

"Rajan's statement may provide some short-term relief, but concerns on inflation and fed tapering still loom large," said Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance.

The benchmark Sensex fell 0.43 percent, or 87.51 points, to end at 20,194.40, at its lowest close since October 8 in a holiday-truncated week.

The Nifty fell 0.47 percent, or 28.45 points, to end at 5,989.60, to mark its longest losing streak since falling for eight consecutive days from July 24 to August 2, tracking a slump in the rupee.

Trading in Indian shares and equity derivatives will remain open on Thursday and it will be closed on Friday, according to a spokeswoman of National Stock Exchange and a BSE statement posted on its web site.

Among rate-sensitive stocks HDFC Bank Ltd fell 1.9 percent, while Hero MotoCorp Ltd ended 1.7 percent lower.

Among real estate developers, DLF Ltd fell 1.3 percent, while Unitech Ltd ended 1.8 percent lower.

Tata Global Beverages Ltd fell 6.6 percent after its quarterly operating profit lagged some analysts' estimates. The company reported its earnings after market hours on Tuesday.

Cipla Ltd fell 2 percent ahead of its July-Sept earnings later in the day.

Sesa Sterlite Ltd fell 2.3 percent adding to Tuesday's 3.4 percent fall after the Supreme Court upheld on Monday a mining ban at top iron ore producing state of Goa.

However among stocks that gained, Sun Pharmaceutical Industries Ltd rose 1.7 percent after its unit, Taro Pharmaceutical Industries Ltd's operating profit beat some analysts' estimates, boosting outlook for the company's results later in the day.

Bata India Ltd shares gained 1.5 percent after its parent Bata B N B V bought 608,657 shares of the company at 888.05 rupees per share via a bulk deal on Tuesday, as per the BSE data.

(Editing by Anand Basu)