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Sensex falls 51 points on results, interest rate concerns

The 30-share BSE index, which lost 394 points in the last two trading sessions, fell 51.15 points further to close at 18,086.20, after swinging between gains and losses.

twitter-logo PTI   Mumbai     Last Updated: May 18, 2011  | 17:11 IST

The Sensex on Wednesday fell for the third straight day, down 51 points at 18,086, on sustained selling by funds amid lower-than-expected corporate earnings, high interest rates and rising fuel prices.

The 30-share Bombay Stock Exchange index, which lost 394 points in the last two trading sessions, fell 51.15 points further to close at 18,086.20, after swinging between gains and losses.

The gauge touched the day's low of 18,020.79, after rising to 18,218.20. It has lost nearly 12.5 per cent this year, mostly on concerns that rising borrowing costs against the backdrop of high inflation, will hurt corporate earnings which have already thrown up some shocks.

Similarly, the broad-based National Stock Exchange index Nifty fell 18.35 points to 5,420.60, after dipping to 5,401.25.

The Reserve Bank of India had raised key rates for the ninth time this year on May 3, by half a percentage point to 7.25 per cent, pushing up overall lending rates.

The most-heaviest weighed on the index, Reliance Industries, fell 2.02 per cent to Rs 901.80, in view of reports of decline in gas output from its blocks in KG basin. The stock has shed 13 per cent this year.

The Sensex-linked biggest state-owned lender State Bank of India fell 2.40 per cent further to Rs 2,355.70, after it posted 99 per cent dip in Q4 profits on Tuesday on higher provisioning for bad loans, pension and taxes.

Major foreign funds led by Morgan Stanley cut their target price on the bank after the results.

The auto sector stocks suffered losses as investors expected higher fuel prices and rising borrowing costs to slow down demand in the world's second-fastest growing major economy. State-run refiners had raised petrol prices by about 8.6 per cent, a record increase.

Tata Motors dropped 3.36 per cent to Rs 1,149.60, Mahindra & Mahindra 0.47 per cent to Rs 669.30 and Bajaj Auto 1.65 per cent to Rs 1,286.65.

The oil and gas sector index suffered the most by losing 1.88 per cent to 9,185.86. followed by Healthcare index (1.40 per cent) to 6,108.96.

The auto sector index lost 0.98 per cent to 8,970.16, realty index 0.92 per cent to 2,120.45 and Bank index 0.69 per cent to 12,079.45.

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