Millennium Post

Day after rate cut: Sensex dips below 19,000 on growth worries

The Bombay Stock Exchange (BSE) benchmark Sensex on Wednesday closed below 19,000 level for the first time in three weeks, falling by 124 points amid concerns that withdrawal of support to the government by the DMK may jeopardise pace of economic reforms.

The Sensex closed 123.91 points lower, or 0.65 per cent, to 18,884.19, a level seen on March 1. The index had lost over 562 points in last three sessions.

Similarly, the broad-based National Stock Exchange index Nifty fell below 5,700 level, by losing 51.55 points, or 0.90 per cent, to 5,694.40.

Brokers said market sentiment turned bearish after the DMK withdrew support to the Congress-led United Progressive Alliance (UPA) government on Sri Lankan Tamil issue and raised fears of halt in the ongoing economic reforms.

They said the investor confidence also dampened as the Reserve Bank of India had on Wednesday, while cutting short-term lending rate, said that there is limited room for further monetary easing.The current downfall was led by stocks of financial and interest-sensitive stocks like realty and banking sectors.

Shares of Housing Development and Infrastructure plunged by 19.90 per cent to Rs 48.70 after credit agency Credit Analysis and Research downgraded the company's non-convertible debentures issue.

State Bank of India dropped by 3.87 per cent to Rs 2,117.75, ICICI Bank by 2.85 per cent to Rs 1,001.60, HDFC Bank by 0.78 per cent to Rs 4.90, Axis Bank by 1.65 per cent to Rs 1,300.30 and Yes Bank by 1.72 per cent to Rs 431.50.

In 30-BSE index components, 19 stocks declined led by Reliance Industries, Larsen and Toubro, BHEL, Maruti Suzuki, NTPC, ONGC, Hindalco and Bharti Airtel.Bucking the weak trend, the stocks of Infosys, Tata Consultancy Services, Cipla, Dr Ready, Hero MotoCorp, Hindustan Uniliver and ITC gained and capped the losses to some extent.
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