The benchmark 30-share BSE Sensex lost 56 points amid higher volumes, erasing most of Thursday’s gain on back of across the board selling following a 1 per cent jump in inflation rates, which rose to a three-an-a-half year high, causing concerns over the country’s growing economy. It is feared that inflationary pressure could set off an imminent hike in interest rates. The 30-share BSE Sensitive index (Sensex) ended with a loss of 55.79 points, or 1.06 per cent, at 5,196.99. The NSE S&P CNX Nifty index shed 21.55 points to end at 1,633.40.Friday’s decline was largely a reaction to the 84-point jump in the Sensex on Thursday following a dip in oil prices from record highs (Wednesday), the strong response to the TCS IPO and a recovery in global markets. However, data released on Friday noon indicated that annual inflation, based on the wholesale price index (WPI), jumped to 7.51 per cent in the week ended 24 July compared with 6.52 per cent in the week ended 17 July.Analysts fear that the interest rates may rise following a sharp jump in the rate of inflation in the last couple of months. A surge in oil prices also hit sentiment. US light crude prices hit a fresh record on Friday close to $45 a barrel.According to Rajiv Sampat, director, Parag Parikh Securities, higher than expected inflation rate was the primary reason for today’s fall in the market.
