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Sensex falls as oil price hike looms
India's main stock index fell 0.6 per cent yesterday to its lowest close in more than seven weeks, as a political rift over fuel prices and high inflation weighed on investors.
- Reuters
- Published: 00:11 June 4, 2008
Mumbai: India's main stock index fell 0.6 per cent yesterday to its lowest close in more than seven weeks, as a political rift over fuel prices and high inflation weighed on investors.
A rally in petrochemical and refining giant Reliance Industries and a recovery in some European markets helped pare losses of as much as 2.2 per cent in the morning, traders said.
India may raise fuel prices today to ease pressure on bleeding oil firms, a top official said, after 10 days of political tussling over the proposal.
The 30-share benchmark BSE index dropped 0.63 per cent, or 100.62 points, to 15,962.56, its lowest close since April 11. Eighteen of the components lost ground.
"Overall sentiment remains negative though I would say the concerns over fuel price hike is a bit overdone," said RK Gupta, managing director of Taurus Asset Management.
Outflows
Rising foreign outflows remain a concern for the market that has fallen 21 per cent so far in 2008. Foreign funds have pulled out more than $3.9 billion from Indian shares this year, after moving in a record $17.4 billion in 2007.
"With growth in question, inflation high, there is no compelling reason for investing in India for foreign investors," said Amitabh Chakraborty, president of equity at Religare Securities.
Reliance, India's most-valuable firm and the heaviest stock in the main index, rose 2.2 per cent to Rs2,406.80 ahead of its annual shareholder meeting on June 12, when it is expected to give an indication of prospects this year.
Stocks favoured by foreign funds fell. Top mobile operator Bharti Airtel fell 4.1 per cent to Rs841.35, while leading engineering firm Larsen & Toubro lost 2.3 per cent to Rs2,849.10.
Infosys Technologies fell 1.5 per cent to Rs1,922.55 and No 4 Satyam Computer lost 3.6 per cent to Rs499.75.
In the broader market, losers overwhelmed gainers 1,818 to 846 on volume of 291.3 million shares.
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