Chennai, India (BBN) – The Sensex today dropped by 92 points to end at three-week low of 32,941.87 points after retail inflation hitting a seven-month high in October dampened expectations of a rate cut by the Reserve Bank.
Besides, inflation at the wholesale level too rose to six-month high of 3.59 per cent in October as the prices of food articles rose, reports The Hindu Business Line.
Lower trend at other Asian following a tepid lead from the Wall Street prompted participants to trim their holdings.
Sentiments suffered a jolt after retail inflation climbed to 7-month high in October, dampened hopes of a cut in interest rates by the Reserve Bank at its upcoming policy meet early next month, brokers said.
The BSE Sensex after a better start at 32,990.03, quickly regained the key 33,000-mark to hit a high of 33,126.55 on value-buying at select counters and recovery in the rupee at the outset.
However, emergence of selling at every rise wiped off initial gains and the index finally settled 91.69 points, or 0.28 per cent down at 32,941.87, its weakest closing since October 26.
The broader 50-issue NSE Nifty dropped 38.35 points, or 0.38 per cent, to close at 10,186.60 after shuttling between 10,248 and 10,175.55
“The further spike in global crude oil prices as well as domestic vegetable prices, would keep the WPI inflation firm in November 2017,” said Aditi Nayar, Principal Economist, ICRA.
“The likelihood of inflation testing the 4 per cent target by late 2017 and staying above it for rest of 2018 reinforces our expectations that central bank will remain on hold in December and the rest of 2018,” said Radhika Rao, Economist at DBS Group Research in a note.
“Markets appear to be consolidating right now,” said R.K. Gupta, Managing Director at Taurus Asset Management.
“Don’t see any major downside or upsides in the market as of now, so I think at the end of the quarter markets will move in narrow ranges,” he said.
Losses in IT stocks such as Tata Consultancy Services Ltd (-1.53%) and power stocks such as PowerGrid (-2.2%) offset gains in auto stocks such as Hero MotoCorp (1.96%), Bajaj Auto (1.37%) and M&M (1.34%).
Bharti Infratel Ltd fell 4.2 per cent after parent company Bharti Airtel Ltd’s unit Nettle Infrastructure Investments Ltd said it was selling a stake in the mobile masts operator.
Repco Home Finance Ltd surged as much 14.1 per cent to hit a two-month high after posting a 22 per cent rise in September-quarter net profit. The stock finished 6.9 per cent higher at Rs. 631.50 on the BSE.