Sensex snaps 2-day rally; falls 114 pts on funds selling

Sensex snaps 2-day rally; falls 114 pts on funds selling

The 30-share Sensex fell by 113.73 to close at 18,978.32 points, ending the two-day rally in which the index had gained over 230 points. The gauge shuttled between 19,167.06 points and 18,898.56 points level during the session. It dropped 4.2 per cent last week, ending 10 per cent below the November 5 record.

In similar fashion, the broad-based National Stock Exchange index Nifty lost 33 points to 5,691.05, after moving between 5,747.65 and 5,662.55. Brokers said trading sentiment turned bearish on concern rising prices would erode profit growth and prompt the RBI to raise interest rates at a meeting next week.

They said foreign funds sold heavy-weight stocks and shifted funds to other emerging equity markets. The foreign funds were net sellers for the ninth straight day on January 17, the longest stretch of withdrawals since May, the official data revealed. The general investors becoming more cautious ahead of the Cabinet reshuffle this evening, was another dampening factor for the market, brokers said.

The capital goods sector index was worst performer by losing 1.20 per cent to 13,517.77 as the stocks of Larsen and Toubro, the largest engineering company fell to a seven-month low by Rs Rs 31.50 to Rs 1,651.95 amid concerns over slowing orders.

The information technology sector was second biggest loser by falling 1.18 per cent to 6,641.65 as Infosys Technologies led a decline in software stocks, halting two days of gains. Infosys fell by Rs 66.15 to Rs 3,252. As the selling pressure spread over a wide-front, the midcap sector index fell by 0.15 per cent to 7,166.31 and smallcap index by 0.09 per cent to 8,901.67. However, a rise in metal, realty, auto and banking sectors capped the losses.