Business Today

Sensex erases early gains; fails to maintain 20k level

The country's top lenders, ICICI Bank and SBI, which have hiked deposit and lending rates, played the biggest role in dampening the positive sentiment in the market.

twitter-logo PTI   Mumbai     Last Updated: December 6, 2010  | 17:02 IST

Weak European bourses, coupled with fag-end selling in financial stocks like ICICI Bank and SBI, saw the benchmark Sensex erasing its early gains to end the day on a flat note in a highly choppy trade.

The country's top lenders -- ICICI Bank and SBI -- which have hiked deposit and lending rates, played the biggest role in dampening the positive sentiment in the market.

Although the Bombay Stock Exchange bellwether Sensex started the week on a firm note, it pared initial gains to settle with a marginal gain of 0.07 per cent or 14.38 points at 19,981.31.

Intra-day, the key index saw a handsome gain of 250 points.

Similarly, the wide-based Nifty of the National Stock Exchange saw a muted close at 5,992.25.

Market experts attributed the see-saw trade to lack of confidence among investors, who booked profits.

"There is a lack of direction in the market due to which investors lose confidence and prefer booking profits at higher levels. Besides, negative European bourses also dampened the sentiment," Networth Stock Broking head of institutional business Prakash Diwan said.

Despite a good show by metal heavyweights, banking counters spoilt the mood of the market which propelled the index finishing the day on a flattish note.

The metal counters swept the market and grabbed the top four spots among the Sensex companies. Copper producer Sterlite Industries was the top gainer, with a gain of 3.65 per cent. Similarly, Tata Steel soared 3.38 per cent, Jindal Steel went up 2.85 per cent and Hindalco too climbed 2.69 per cent.

Driven by rise in these stocks, the BSE metal index finished the day higher by 371.92 points at 16,562.35.

"Metal stocks are under-valued, which is why it has attracted strong buying interest," Diwan said.

SBI, which raised deposit rates by up to 150 basis points or 1.5 per cent across various maturities, emerged as the top loser by plunging 3.86 per cent, while ICICI Bank tumbled 2.66 per cent.

HDFC Bank too suffered losses and fell by 0.29 per cent.

"The rate hike by SBI was the major turn-off for the entire banking sector," Geojit BNP Paribas Research Head Alex Matthews said.

Index heavyweight, Reliance Industries, was the major contributor in helping the Sensex end the day on a positive note, even though it suffered some setback from the global front along with profit-booking.

RIL settled 1.33 per cent up, while Tata Motors closed 3.32 per cent higher and was the second best contributor in the mild gain of the market.


  • Print

A    A   A