Sensex down 126 pts at 2-wk low as ITC slips over 3.5 pc

Sensex down 126 pts at 2-wk low as ITC slips over 3.5 pc

Falling for fifth straight day, the BSE benchmark Sensex today lost 126 points to end at a 2-week low with ITC shares plunging over 3.5 per cent after its weight was reduced in FTSE global equity index series.

ITC, which is one of the most influential stocks in 30-share Sensex, closed 3.55 per cent down on heavy selling after index provider FTSE cut the Indian conglomerate's weight in global equity index series from 75 per cent to 24 per cent.

"ITC was one of the major reasons. It dropped by a wide margin. Towards the end, others like IT stocks also weakened," said Dipen Shah, Head - PCG Research, Kotak Securities.
Overall, 23 stocks in Sensex, including L&T, HUL, SBI, HDFC and Infosys, closed with losses. Consequently, the gauge dropped 126 points, or 0.65 per cent, at a two-week low of 19,229.26 points. It has now lost 258 points in five days.

Similarly, the NSE 50-share Nifty also declined by 36.50 points or 0.62 per cent to finish at 5,851.50.

Brokers said the cautious investors also indulged in selling over concern that any rise in Wholesale Price Index (WPI) data might delay the much-awaited rate cut by Reserve Bank. WPI-based inflation data will be announced tomorrow.

"With retail inflation spiking, investors and traders are worried that the RBI may choose to delay the much sought rate cuts," said Amar Ambani; Head of Research - IIFL.

The selling picked up in the second half of the session after European stocks dropped as investors focussed on reports that the US central bank's plan to buy USD 45 billion a month of treasuries may fail to offset effects of US 'fiscal cliff'.

Selling was wide-based as all sectoral indices, barring auto and refinery, closed with losses upto 2.73 percent.

Second-line stocks attracted profit-selling after rising for last few days. As a result, BSE-Midcap and BSE-Smallcap indices underperformed the Sensex, losing around one per cent each.

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