Indian equity indices snapped their two-day winning rally, following fears of further tightening after a rise in food inflation. The weak cues from the global markets also impacted the sentiment. Asian stocks were down on Thursday after Australian retail sales unexpectedly fell and New Zealand’s jobless rate rose to the highest level in more than 10 years. Dealers in the markets said the markets would be waiting for the jobless claims data in the US.
According to the provisional data provided by the Bombay Stock Exchange (BSE), foreign institutional investors (FIIs) were net sellers at over Rs 150 crore, while domestic institutional investors bought stocks worth about Rs 240 crore.
The Sensex of BSE lost 271.10 points, or 1.64%, to end the day at 16,224.95. The broader S&P CNX Nifty of National Stock Exchange (NSE) was down by 86.50 points, or 1.75%, to close the day at 4,845.35.
Data released by the government stated that food inflation rose to 17.56% in the week ended January 23, 2010, from 17.40% in the previous week.
Shanghai Se Composite IX lost 0.23%, or 8.53 points, Hang Seng Composite fell by 1.74%, or 50.77 points, and Nikkei 225 fell 48.35 points, or 0.46%. Only South Koreas Kospi ended with marginal gains.
Karvy Stock Broking vice-president Ambareesh Baligasaid, ?Overall sentiment is weak and if we see the Nifty breaching the 4,800-mark, there might be a further correction of 8-10%. The budget could be a trigger for the market in the coming days.?
Market participants said with anxiety of a hike in interest rates, intense selling was seen in realty stocks, while auto stocks fell after reports of a hike in fuel prices. All the BSE sectoral indices ended the day in negative terrain with the auto, metal and realty being the worst performers.