Sensex ends down 61 points

At one point of time,the Bombay Stock Exchange8217;s 30-share barometer sank by 212.12 points to hit a low of 17,819.99. However,fag-end buying in auto and FMCG stocks and short-covering helped the market to pare most of losses suffered in early trade.

On a monthly basis,the Sensex has recorded a gain of 0.6 per cent in August. This is the third monthly gain in a row.

In a choppy session,the National Stock Exchange8217;s Nifty Index finished at 5,402.40,down by 0.24 per cent.

8220;While markets corrected a bit after the announcement of the numbers,they were weighed down more by the concerns of weakness in the global indices. The valuations at current juncture are comfortable,which will ward-off any risk of any major selling,8221; Angel Broking CMD Dinesh Thakkar said.

The global sentiment was weak as slower-than-estimated growth in personal incomes in the US heightened concerns that economic recovery may slow.

Extending the losses for the seventh consecutive session,index heavyweight Reliance Industries Ltd plunged 3 per cent to end at Rs 918.85,amid the energy giant8217;s entry into the hospitality sector by buying a stake in EIH Ltd.

8220;The EIH deal failed to enthuse the investors and selling pressure is mounting on RIL,8221; Geojit BNP Paribas Research Head Alex Mathews said,adding that the stock is unlikely to recover in the coming days.

Anil Ambani-led RCom also saw selling pressure and dropped 3.68 per cent,the most in the Sensex pack.

Other major losers include Jaiprakash Associates down 3.5 per cent,Jindal Steel down 2.11 per cent,DLF down 1.82 per cent and BHEL down 1.38 per cent.

Some momentum brought in by auto,FMCG stocks was offset by the steep fall in consumer durables,oil and realty scrips.

In another sign that growth in India remains on a strong footing,the economy expanded by 8.8 per cent during the April-June period,in line with the market consensus.

However,analysts said while the GDP figures indicate the Indian economy is on a recovery path,investors are concerned about widespread inflationary pressures,which pose a downside risk to the growth momentum going forward.

To tame the inflationary pressure,8221;The RBI is expected to continue with its tight monetary policy and may hike repo and reverse repo rates by 25 bps each and CRR by 50 bps during the current fiscal,8221; Dun amp; Bradstreet India Senior Economist Arun Singh said.

Banking stocks declined on fears of a further hike in rates by the RBI. State Bank of India dropped 1.30 per cent,HDFC 0.45 per cent and HDFC Bank 0.39 per cent. However,ICICI Bank bucked the trend and closed nearly 1 per cent higher.

Auto stocks attracted buying on hopes of good monthly sales data. Mamp;M jumped 2.85 per cent,Maruti 1.68 per cent and Tata Motors 1.61 per cent.

Other major gainers included ITC up 2.10 per cent,HUL up 0.46 per cent and Bharti Airtel up 1.32 per cent.

Hero Honda,which had declined nearly 7 per cent during the day on reports that Hero and private equity firm KKR are in talks to acquire Honda Motor8217;s stake in the two-wheeler major,recouped its losses and ended almost flat.

On the global front,Asian stocks tumbled sharply.

Japan8217;s Nikkei index plunged 3.55 per cent and China8217;s Shanghai index 0.52 per cent. European bourses were also trading lower at mid-session. US Futures were also weak,signalling a lower opening on Wall Street.