Sensex falls 296 pts to 3-week low

Sensex has fallen over 600 points in two days.

The market opened in the positive zone but failed to maintain initial gains on all-round profit-booking that also extended to metals and banking counters.

Interest rate sensitive realty stocks extended past few days of losses on investor concerns that interest rates might be hiked further,hitting corporate earnings,in view of high inflation.

High prices are a concern not only in India but across the globe,including China,which is trying to suck out excess liquidity in the financial system and making borrowing costly.

Most metal stocks declined on worries over monetary tightening in Asia and Europe to tame inflation that could affect demand negatively.

In a volatile trade,the 30-share Bombay Stock Exchange index,Sensex,initially touched a high of 19,649.22 on renewed buying in auto,consumer durables,oil amp; gas,capital goods and banking.

However,selling began after the morning session and pulled Sensex down to 19,091.17,loss of 295.65 points or 1.53 per cent from its last weekend8217;s level.

Last Friday,it had tumbled 310.04 points or 1.57 pct. The NSE 50-share Nifty also ended lower by 95.45 points or 1.64 per cent at 5,729.10.

8220;The markets fell sharply after the weaker-than-expected Infosys numbers on Friday and high inflationary expectations,8221; said Anand Kuchelan,VP,Research at Padmakshi Financial Services Ltd.

8220;IT stocks were beaten down today. Interest rate sensitives like banks,realty and infrastructure stocks continued to be the laggards,8221; said Shanu Goel,Senior Research Analyst,Bonanza Portfolio.

8220;Market sentiments have taken a beating with below expected results from index heavyweight Infosys,8221; he added. Asian stocks fell as China raised the limit of banks8217; required reserves to control excess liquidity and tame high inflation. The key benchmark indices in Hong Kong,Taiwan,Indonesia,Singapore and South Korea fell between 0.04 per cent and 0.74 per cent,while China8217;s Shanghai Composite rose by 0.21 per cent.

European markets were trading lower with euro-zone debt problems weighing on the market. The key benchmark indices in UK,Germany and France were down between 0.72 per cent and 1.11 per cent.

Major losers from the Sensex pack were DLF 4.69 pc,TCS 3.43 pc,Jaiprakash Asso 3.13 pc,Tata Steel 2.92 pc,Infosys Tech 2.80 pc,Larsen 2.79 pc,Hindalco 2.76 pc,Tata Motors 2.19 pc,BHEL 1.90 pc,HDFC Bank 1.89 pc,Reliance Infra 1.86 pc,SBI 1.80 pc,ICICI Bank 1.73 pc,HDFC 1.71 pc,Cipla 1.69 pc,Rel Com1.68 pc,Jindalsteel 1.40 pc and Bharti Airtel 1.17 pc.

However,Hero Honda shot up 1.80 per cent,Hindustan Unilever by 1.65 per cent and Bajaj Auto by 1.09 per cent.

Among the major indices,BSE-Realty fell 3.17 per cent,BSE-IT 2.73 pc,BSE-Teck 2.32 pc,BSE-CG 2.12 pc,BSE-Metal 1.92 pc and Bankex 1.57 pc.

The total market breadth remained negative as 1,826 stocks ended with losses,while 1,083 stocks clocked gains at BSE.

The total turnover declined to Rs 3,391.27 crore,from last Friday8217;s level of Rs 3,760.44 crore.

STOCKS THAT MOVED

Kanoria Chemicals amp; Industries rose 20 per cent to Rs 49.45,after it sold its chloro chemicals division to Aditya Birla Chemicals India Limited for Rs 8.30 billion 187 million in an all-cash deal.

Hanung Toys and Textiles rose 1.6 per cent to Rs 217.30,after its board approved raising 32 million through a global depositary receipts issue.

MAIN TOP THREE BY VOLUME ON NSE

Unitech on 23.6 million shares

Suzlon Energy on 21.3 million shares

IFCI on 20.4 million shares