Sensex down 61 pts on global cues; RIL sheds 3.05 pc

The Sensex, which tumbled nearly 212 points on heavy selling, recouped some of the losses at the fag-end of trade on buying at lower levels and ended 60.99 points down at 17,971.12. The broad-based National Stock Exchange index Nifty fell by 13.05 points to 5,402.40 after touching an intra-day low of 5,348.90.

Market analysts said the selling pressure was caused by concerns that the fastest economic growth registered by the Indian economy in 30 months might prompt the Reserve Bank of India to continue with its monetary policy tightening measures. The government today announced that the Gross Domestic Product grew by
8.8 per cent in the April-June quarter against 6 per cent a year ago, which was in line with the market expectations.

In addition, a 3.05 per cent fall in shares of Reliance Industries, the most valuable entity on the Sensex, dragged the broader market down. RIL fell by Rs 28.90 to Rs 918.85 as investors reacted negatively to the petrochem giant's surprise move to enter the hotel business.

A weak trend in Asia and a lower opening in Europe played a major role in pulling down the domestic market as well, marketmen said. European bourses fell following heavy overnight losses in the US market on concerns about weak consumer spending data and the falling value of the US dollar against the yen.

State Bank of India, the country's biggest lender, also fell sharply to its lowest level since August 11, losing Rs 36.45 to Rs 2,764.85. In the 30-BSE index components, 20 stocks closed with losses, while ten ended higher

Losses registered by Jindal Steel, BHEL, Jaiprakash Associates, HDFC, RCom, DLF and R-Infra weighed on the market sentiment, but a smart rise in ITC, ICICI Bank, M&M, Tata Motors, Infosys Tech and Bharti Airtel cushioned the index to some extent.

The consumer durable sector index suffered the most, losing 2.32 per cent to 5,669.30, followed by the oil and gas sector, which dipped by 1.95 per cent to 9,920.62. With selling pressure spread over a wide-front, the small-cap index fell by 1 per cent to 9,540.56 and the mid-cap index by 0.58 per cent to 7,596.84.