Interest rate hike fears push Sensex down 492 points (Intro Roundup, supersedes Roundup)

MUMBAI - It was a disappointing day for the Indian stock markets with traders resorting to wide-spread selling, booking profits in a big way, which resulted in key indices ending in the red during the first week of the new trading year.

A sort of panic spread through the markets, which started with interest rate-sensitive stocks correcting, as the notion gained ground that the Reserve Bank of India was going to hike rates to curb inflation.

The 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened at 20,163.85 points, closed at 19,691.81 points, down 492.93 points or 2.44 percent from its previous close at 20,184.74 points.

At the National Stock Exchange (NSE), the 50-share S&P CNX Nifty was trading at 5,904.6 points, down 2.38 percent or 143.65 points.

Broader markets were also in the red, with the BSE midcap index closing 2.49 percent lower and the BSE smallcap index ending 2.86 percent down.

The selling spread throughout the market breadth with all the 13 sectoral indices on the BSE closing in the negative.

Metals, auto and consumer durable stocks were among the biggest losers.

The market breadth was negative, with 620 stocks advancing, compared to 2,330 scrips on the decline, while 97 stocks were unchanged.

All the 30 stocks on the Sensex ended in the red.

Top losers included Hindalco Industries, down 7.02 percent at Rs.233.15; Tata Motors, down 5.52 percent at Rs.1,189.50; Bharti Airtel, down 4.12 percent at Rs.338.70; and M&M, down 4.07 percent at Rs.738.60.

According to data available with SEBI, foreign institutional investors sold scrips worth $47.18 million Friday.

Other major bourses in Asia were mixed, though trader sentiments improved after release of strong US non-farm pay roll data.

The Japanese Nikkei index closed 0.11 percent up at 10,541.04 points, while the Chinese Shanghai Composite index moved 0.52 percent up at 2,838.8 points.

Hong Kong’s Hang Seng was sluggish, closing 0.12 percent up at 23,786.3 points.

European bourses were weighed down by weakness in the energy sector as commodity prices slipped from recent highs.

Around mid-day, the German DAX was ruling flat at 6,979.73 points, while the French CAC 40 was trading 0.46 percent down at 3,886.64 points.

The UK’s FTSE was ruling 0.44 percent lower at 5,993.3 points.