Sensex dips 55 points on rate hike fears, weak global cues

The Bombay Stock Exchange's 30-share index, which shed 56 points in the previous session, today lost another 54.88 points at 18,507.04, on concerns that high inflation in June might force the Reserve Bank of India to hike borrowing costs.

Broad-based National Stock Exchange index Nifty fell by 14.05 points to 5,567.05.
Brokers said weakness in Asia and lower opening in Europe amid concern over the fate of political negotiations on raising US debt by August to avoid a default by the USD 14 trillion-economy made investors cautious.

Besides, failure of eight European banks in clearing the European Banking Authority’s stress tests spiked the market.

The bearish sentiment abroad infected the software companies' stocks at home as they get over 50 per cent of their revenues from the US and European market exports.
Infosys, the second-heaviest scrip on Sensex fell 0.60 per cent to Rs 2,714.05, while the country's largest IT services exporter lost 1.97 per cent at Rs 1,125.40 a piece.

Market sentiment was also jittery ahead of quarter earnings by some leading companies on expectations that they might fall behind the market expectations. Three out of the four Sensex companies' first quarter earnings have fallen short of analyst estimates as rising interest costs crimped profits.

Auto, IT, Healthcare and Teck stocks traded low while gains in Realty, Consumer Durable, Metal and Power sectors saved the market from any major fall.