Sensex drops 352 points

Concern over imminent fuel price hike

MUMBAI: After a promising start, the stock markets witnessed a downtrend on Monday and the benchmark Sensex dropped by 352 points to close at 16063.18 on fears of an imminent hike in fuel prices.

The National Stock Exchange index Nifty also shed 130.50 points to close at 4739.60.

Aggressive selling

The markets opened strong with a gain of over 217 points and even hit the intra-day high of a high of 16632.72 but aggressive selling emerged following weak trends in European markets owing to fears of fallouts of high crude prices.

Marketmen said investors seem more concerned about the anticipated hike in fuel prices as it will have further adverse impact on inflation, which crossed the highest level in more than three-and-a-half years. Meanwhile, a decision on raising retail fuel prices was delayed further with a consensus on price hike eluding the government even as losses of state-run oil companies widened to Rs. 650 crore a day in the light of sky-high global crude prices.

European markets were trading substantially lower in their early trade while Asian indices closed with moderate to smart gains on Monday.

Realty shares hit

Analysts attributed the initial surge by 217 points to better-than-estimated GDP growth of 9 per cent in 2007-08.

Realty, PSU, metal, power and bank shares were hit hard.

Auto stocks bucked the trend on some buying support prompted by a decent rise in monthly sales.

Public sector NTPC with a loss of 6.39 per cent topped the list of index-related losers, followed by ACC at 5.23 per cent and Hindalco 5.05 per cent.

Among the gainers, Maruti Suzuki which ended 2.85 per cent higher was the star performer. Hero Honda gained 5.6 per cent and Bajaj Auto 1.52 per cent.

The market breadth was extremely negative with 2,066 losers against 600 gainers on the BSE. The trading volume was relatively low at Rs. 4,809.14 crore.

The broader BSE-100 index tumbled by 194.65 points to 8488.62 from its previous close of 8683.27. — PTI