Sensex sheds 1340 pts in 5 days; cap goods, banks drag
10 Jan 2011
Equity benchmarks saw a free-fall on Monday and kicked off the second week of 2011 on a bearish note, dragged down by sectors like capital goods, oil & gas, financial, metal and realty ahead of earning season for the quarter ended December 2010.
The Nifty extended losses for fifth consecutive session and touched one-month low during the day; shed 395 points while the Sensex dropped 1340 points in five days.
Contraction in companies' margins due to rise in commodities' prices, soaring inflation and likely rate hike by RBI to contain inflation were the main reasons behind this sell-off, say experts.
Rajat Rajgharia of Motilal Oswal Securities expects the markets to go down from current levels. Ajay Srivastava, CEO of Dimensions Consulting too says markets could correct 8-10% from current levels. ''Companies are likely to see margin contraction in 2011.''
Rajgharia further says rise in the global commodities and rise in the interest rates may damage earnings of several companies. ''A lot of the core India stories, which are the domestic stocks, right from banks, autos, cement, infrastructure, engineering, may see downgrade in earnings, if these trends were to persist,'' he adds.
The 30-share BSE Sensex closed at 19,224, down 467 points and the 50-share NSE Nifty plunged 142 points to 5,763.
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