Interest rate hike fears spook Sensex, closes 544 points down
By IANSFriday, January 7, 2011
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 that the Reserve Bank of India was going to hike rates to curb inflation strengthened.
The 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened at 20,163.85 points, closed at 19,639.94 points (provisional), down 544.80 points or 2.7 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 5,888.55 points, down 2.64 percent or 159.70 points.
Broader markets were also in the red, with the BSE midcap index closing 2.65 percent lower and the BSE smallcap index ending 2.98 percent down.
The selling spread throughout the market breadth with all the 13 sectoral indices on the BSE closing in the negative.
