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Sensex falls 238 pts on 2G scam probe

The 30-share BSE benchmark, which had lost 47 points in the previous session, fell further by 238.16 points to 19,696.48, after touching a day's low of 19,611.35.

twitter-logo PTI   Mumbai     Last Updated: December 8, 2010  | 17:13 IST

Selling pressure gathered momentum, as the Bombay Stock Exchange benchmark Sensex on Wednesday fell over 238 points on heavy-selling by funds in telecom stocks, as the government intensified probe into the 2G spectrum allocation scam and a weak global trend.

The Central Bureau of Investigation has launched searches at the homes of former telecom minister A Raja and other officials in connection with 2G spectrum licensing scam.

Bombay Stock Exchange's Sensex, which had lost 47 points in the previous session on concerns of interest rate hike, fell further by 238.16 points to 19,696.48, after touching a day's low of 19,611.35.

The wide-based National Stock Exchange index Nifty fell 72.85 to 5,903.70. In volatile trading, the index shuttled between 5,960 and 5,878.60 during the session.

As the selling pressure spread over a wide-front, all sectoral indices ended in red. In 30-BSE index components, 28 closed with losses, while Tata Motors and ONGC ended with moderate gains.

Barring a better close in Japan's Nikkei, a weak trend in the Asian region and lower opening in Europe further dampened the trading sentiment. Asian stocks fell the most in two weeks on speculation that China would raise interest rates to stem inflation.

The MSCI Asia Pacific Index slipped 0.8 per cent to 132.64, the biggest drop since November 26.

In the telecom sector, the nation's second-largest operator Reliance Communications fell 3.21 per cent to Rs 129.85, as CBI searched homes of former telecom minister A Raja in connection to the scam.

Unitech, a real-estate company that has a phone venture with Telenor, dropped 2.26 per cent to Rs 64.85.

Banking shares fell for the third-straight day on worries that rising deposit rate, without any change in lending rates, would affect lenders' profit margins. The banking sector index lost 2.03 per cent to 13,068.92 as State Bank of India tumbled 2.01 per cent to Rs 2,807.80, ICICI Bank 0.39 per cent to Rs 1,106 and HDFC Bank 3.07 per cent to 2,280.15.

The realty sector tumbled 2.51 per cent to 2,840.02 as DLF, Unitech, HDIL, DB Realty stocks declined on concerns that rise in deposit rate might tighten liquidity in the market.

The metal index lost 2.01 per cent to 16,341.15 after Sterlite retreated 1.77 per cent to Rs 169.15, Hindalco 2.12 per cent to Rs 222.05, Tata Steel 2.49 per cent to Rs 623.65. Copper and aluminium fell 1.1 per cent in London.

Uflex continued to hit lower level daily limit by falling 16.39 per cent to Rs 163, after its chairman and managing director convicted in a case relating to land allotment.

However, the falling trend was cushioned, as oil company stocks gained on expectations of higher revenue, as crude oil prices rose to 26-month high of $90 a barrel in overseas markets. Indian Oil was up Rs 2.75 to Rs 371.75, Hindustan Petroleum Rs 13.40 to Rs 409.95 and Bharat Petroleum Rs 14.05 to Rs 677.

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