Markets end in red on higher inflation nos, weak global cues

06 November 2008

Markets ended in red after an unexpected increase in inflation numbers and sell-off in global indices. The Nifty closed below the 3,000 mark and the Sensex slipped below the 10,000 level. Metal stocks led the crash followed by oil, telecom, technology, banking and auto stocks. Midcap and small cap stocks were also under pressure.

Reliance Industries, Bharti Airtel, Infosys, SBI, HDFC, ICICI Bank, Tata Steel, HDFC Bank, Sterlite Industries, Reliance Communication and Tata Motors were real culprits.

Frontline indices had opened with huge gap down following profit booking in global indices and remained weak till the afternoon. After 1:30 pm, indices had started recovery and was near to Wednesday's close, but more than expected increase in Inflation numbers and further dip in European indices pushed the markets sharply lower again.

The Sensex closed with a loss of 385.79 points or 3.81% at 9,734.22, after hitting an intraday low of 9,635.22 (down 484.79 points from previous close). The Nifty ended at 2892.65, a drop of 102.3 points or 3.42% over previous close. It has touched a low of 2860.25, (down 134.7 points).

Inflation came in at 10.72% for the week ended October 25 as against 10.68% in previous week. This was more than expectations, as CNBC-TV18 was estimating inflation at 10.45%. 

''People expected the inflation figure to be much lower,'' said Mehraboon Irani, VP, PMS, Centrum Broking. ''While it's a disappointment, I think it's an aberration.'' Irani said that inflation numbers may be headed to single digits by December. ''It is a disappointment definitely but the trend is downwards,'' he added.