Sensex ends 121 points down; inflation disappoints street
14 Dec 2011
The Sensex wiped out all its yesterday's gains post higher than expected monthly inflation numbers and weak European cues. Capital goods, banks, power, auto and realty stocks took beating in the second half of trade. The Sensex fell 121.37 points, to close at 15,881.14 and the Nifty dropped 37.35 points, to end at 4,763.25.
Today's inflation suggested that the Reserve Bank of India may not cut interest rates in Friday's policy meet; which means high interest cost remains a cause of concern for companies coupled with current slowdown worries.
November inflation stuck above 9% while most experts had expected inflation to drop below 9%. Inflation eased to 9.11% versus 9.73% in October.
Experts believe the Reserve Bank of India (RBI) will not cut rates in the monetary policy on December 16.
Rajiv Anand of Axis AMC feels that the RBI will cut rates in April, assuming that the trajectory of both inflation and growth continue at the current levels.
Consistent fall in the Indian rupee was another biggest worry for the market. Ajay Srivastava, chief executive officer of Dimensions Consulting says that this rapid decline could have serious repercussions for the market and economy in general, going ahead.