Hawkish step pushes bulls on the backfoot

Hawkish step pushes bulls on the backfoot

Fears of further monetary tightening by RBI to tame high inflation, firm global crude oil prices and soft cues from the Asian peers besides political uncertainty combined weighed on the market completely wiping out all the gains it made on the previous session.

Also fresh allegations of government corruption dented investor sentiments in D-Street and kept markets in the negative zone.  The opposition parties had called for resignation of Prime Minister Manmohan Singh after a Wikileaks cable suggested the Congress party bought votes in parliament in 2008 to secure a civilian nuclear deal between India and the US, forcing adjournment of both Houses of Parliament.

Another cause of concern was the rising oil prices as the London Brent crude headed back to US$112.37, with gains of nearly 2 per cent and Nymex crude future was inching towards US$100 a barrel - rising 1.5 per cent  on Middle East tensions. Back home, cooling crude oil prices aided intraday recovery from an initial slide caused by weakness in Asian markets triggered by worsening nuclear crisis in Japan. The market lost ground again as oil prices bounced back.

Volatility ruled the roost as the key benchmark indices cut losses in mid-morning trade on intraday recovery as Asian markets triggered by hopes Japan’s nuclear crisis is easing. Eleven out of the 13-sectoral indices on BSE logged declined.

The popular Sensex at BSE was down 208.82 points or 1.14 per cent to close at 18,149.87 points. It lost 254.67 points at the day’s low and fell 4.42 points at the day’s high.

The 50-unit S&P CNX Nifty at NSE was down 64.50 points or 1.17 per cent to settle at 5,446.65 points in the day’s closing after swinging between 5,510.05 and 5,435.30 during the day. Broader indices wise, the BSE Mid-Cap index slipped 0.29 per cent and the BSE Small-Cap index declined 0.38 per cent, both outperforming Sensex.

The market breadth, indicating the overall health of the market, was negative with as many as 1652 shares on BSE declined while 1231 shares advanced and a total of 116 shares remained unchanged.

The total turnover at BSE amounted to Rs 2979 crore, lower than Wednesday’s Rs 3288 crore.  Meanwhile during the day, Asian markets fell in choppy trade as Japan struggled to avert a nuclear catastrophe on Thursday, spraying water from both the air and ground on the Fukushima Daiichi nuclear plant. 

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