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Global inflation hits Sensex, down 296 points

Erasing initial gains, the BSE Sensex on Monday dropped about 296 points to 19,091 in a volatile session on funds selling fundamentally strong stocks led by Infosys Technologies amid a weak global trend.

twitter-logo PTI   Mumbai     Last Updated: April 18, 2011  | 16:40 IST

Erasing initial gains, the BSE Sensex on Monday dropped about 296 points to 19,091 in a volatile session on funds selling fundamentally strong stocks led by Infosys Technologies amid a weak global trend.

The Sensex, which had lost 310 points in the previous session, fell further by 295.65 points to 19,091.17 as Infosys - the second most heavy index-linked stock - remained weak post lower-than-expected earnings announced last week.

The gauge initially rose to 19,649.22 and touched the day's low of 19,071.47.

In similar fashion, the National Stock Exchange index Nifty, after a higher start 5,897.90, fell to close lower by 95.45 points to 5,729.10.

Infosys dipped further today as its stock was cut to "neutral" from "outperform" by Credit Suisse Group on "disappointing" results and "poor margin guidance". It, along with TCS, pulled down the IT index.

Besides, Asian trend and European openings were weak on mounting inflation around the globe amid Europe's sovereign debt crisis rearing head again.

The information technologies index fell by 2.73 per cent to 6,087.88, as Infosys slid 2.80 per cent to Rs 2,905.20, extending the 9.6 per cent slump on April 15. TCS fell 3.43 per cent to Rs 1,149.70. The two companies have a combined 14 per cent weighting in the Sensex.

HDFC Bank lost amid concerns that the Reserve Bank of India might raise rates further to cool inflation. The stock dropped 1.89 per cent to Rs 2,315.70. ICICI Bank lost 1.73 per cent to Rs 1,082.20. State Bank of India, the largest, fell 1.80 per cent to Rs 2,752.95.

The most-heaviest on the Sensex, Reliance Industries fell 0.81 per cent to Rs 1,010.15 on concerns the rising crude oil prices might reduce revenue.

As the selling pressure spread over a broad front, the midcap index fell by 1.29 per cent to 7,116.12 and smallcap index by 0.81 per cent to 8,737.06.

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