Sensex plunges by 230 pts on rising inflation, easing export

The benchmark Sens*x fell for the fourth day on Thursday losing 230 points due to heavy selling by investors after official data showed that inflation rose the most since May and exports declined in September.

The Bombay Stock Exchange barometer, which had lost nearly 527 points in the last three trading sessions, settled at 16.052.72 points, a loss of 230.77 points over the previous close. Earlier in the day, the 30-share index had dipped below crucial 16,000 points level.

The wide-based National Stock Exchange index Nifty dipped by 75.60 points to close at 4,750.55 points.

Brokers said that selling pressure gained momentum after investors off-loaded part of their holdings as inflation accelerated the most since May and exports declined by 13.8 percent in September for the 12th month in a row.

Inflation rose to 1.51 percent as of 17^th October on the back of higher food prices.

Expiry of October month contracts in the derivatives segment and weak global trends also weighed on market sentiment, brokers said.

Banking stocks continued to be the top losers on worries that their profits would be hurt after the Reserve Bank raised the provision ratio for bad debts in its credit policy review.

Asian markets fell after disappointing US housing data fuelled concerns about global growth.

Bank of India fell by 12.33 per cent to Rs 357.80, State Bank of India by 1.05 per cent to Rs 2,195 and ICICI Bank by 4.81 per cent to Rs 771.25.

The BSE banking index dropped by 2.55 per cent to 9,290.23 points.

The realty sector index suffered the most falling by 6.40 per cent to 3,820.46 points after Unitech dropped by 7.07 per cent to Rs 80.85 and DLF Ltd by 6.81 per cent to Rs 375.60.

The metal sector index was second worst performer by losing 2.58 per cent to 13,904.73 points as Tata Steel fell by 3 per cent and Sterlite Industries by 1.96 per cent as copper prices lost 2.5 per cent on the Shanghai Exchange.

Teck index fell by 2.04 per cent to 2,911.50 points, power index by 2.01 per cent to 2,958.76, IT index by 1.78 per cent to 4,447.39, capital goods index by 1.70 per cent to 2,932.69 points, consumer durable index by 0.90 to 3,344.66 points, oil and gas index by 0.70 per cent to 9,705.54 points and auto index by 0.69 per cent to 6,248.52 points.

With the selling pressure spilling over a wide-front, the BSE midcap index fell by 1.95 percent to 6,046.79 points and the BSE smallcap index by 1.29 percent to 7,113.84 points.