Sensex posts weekly loss of 612 points

The 30-share BSE index is down 10.3 percent so far this month, with foreign funds pulling out about USD 755 million since Tuesday as an improving US economy drew investors away from emerging markets such as India. The index is on track to record its worst monthly decline since October 2008.

Mumbai: Continuing its fall for the third day, the BSE benchmark Sensex Friday dropped nearly 289 points to a 5-month low on brisk selling in heavy-weight financial companies, on investor concerns about rising interest rates in view of high inflation and weak global cues.
 
The 30 share index, Sensex tumbled 611.56 points, or 3.22%, to 18,395.97 in the week ended Jan. 28, 2011. On the other hand, the broad based NSE Nifty lost 184.35 points, or 3.24%, to 5,512.15 in the same period.
Soaring inflation and rate rises are starting to hit corporate margins in India, tempting more foreign fund managers to slash holdings in favour of markets that can better capitalise on the global economic recovery.
 
The 30-share BSE index is down 10.3 percent so far this month, with foreign funds pulling out about USD 755 million since Tuesday as an improving US  economy drew investors away from emerging markets such as India. The index is on track to record its worst monthly decline since October 2008.
 
The Bombay Stock Exchange benchmark index Sensex, which had lost 467 points in the last two trading sessions, fell further by 288.46 points to 18,395.97, a level last seen on September 3, 2010, as investors indicated that rising prices and interest rate hikes would crimp company profits.
    
The index touched the day's low of 18,235.45
    
Similarly, the broad-based National Stock Exchange index Nifty dipped below the 5,500 level before ending 92.15 points lower at 5,512.15 led by interest-linked stocks like realty, auto, consumer durable as well as the metals sector.
    
A weak Asian trend and lower opening in Europe further dampened the trading sentiment.
    
Stock markets have continued to decline since January 25, when the Reserve Bank of India increased interest rates for the seventh time since March and revised upwards its inflation forecast to 7 percent by the end of this fiscal.
    
Brokers said that rising input costs were eating into the margins of most consumer companies and raised concerns among investors on their earnings.
    
The realty sector index suffered the most by losing 4.96 percent to 2,279.62, followed by consumer durables index by 3.91 percent to 5,923.17. The auto sector index lost 3.56 percent to 8,841.90.
    
The most-heaviest on the Sensex, Reliance Industries fell by 3.02 percent to Rs 914.50 and second-heaviest Infosys Technologies by 0.68 percent to Rs 3,173.50. The two carry nearly 23 percent weightage on the index.
    
As the selling pressure spilled over a wide-front, smallcap index lost 3.59 percent to 8,546.29 and midcap index by 2.66 percent to 6,898.37.

PTI

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