Sensex tumbles 162 pts to two-month lows

Sensex tumbles 162 pts to two-month lows

The Sensex today tumbled 162 points, extending its losing run to the sixth day, on fag-end selling after RBI dashed hopes of a rate cut and Samajwadi Party's sudden announcement of candidates for 2014 polls made investors nervous over the political situation.

Eurozone debt worries and rupee trading above 55-level against dollar also impacted the sentiment.

After a better start at 18,563.32, the Sensex erased early gains of around 92 points after selling in rate-sensitives gathered pace in the last half hour of trading.

RBI Governor D Subbarao said in Pune that at 7.45 per cent inflation is certainly "quite high". Traders said after headline inflation fell to an 8-month low in October, investors had hoped for a rate cut. However, Subbarao's comments poured cold water on such hopes, they added.

The sentiment took a further hit when Samajwadi Party announced the first list of candidates for 2014 polls, taking everyone by surprise.

"The market also feels Mulayam Singh Yadav's Samajwadi Party has revived the possibility of early elections by releasing the first list of candidates at least 15-18 months before polls are scheduled," said Rikesh Parikh, Vice President Equities, Motilal Oswal Securities.

The 30-share Sensex finally closed 162 points, or 0.88 per cent, lower at 18,309.37 -- a level last seen on September 20.

ICICI Bank lead the 24 losers in 30-share Sensex, followed by Tata Motors, SBI, Bhel, Maruti and HDFC.

The NSE 50-share Nifty also dropped by 56.95 points, or 1.01 per cent. to finish at nearly two-month low of 5,574.05.

Barring Hong Kong and Japan which closed with gains, other Asian markets ended up to 0.77 per cent lower.

For the week, the Sensex and the Nifty were down by about 2 per cent on concerns over the so-called US 'fiscal cliff', worries over India's fiscal deficit and weak macro data, said Dipen Shah, Head of PCG Research, Kotak Securities.

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