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Sensex retreats from record high,drops 240 points on rate concerns

Friday, 24 January 2014 - 10:34am IST Updated: Friday, 24 January 2014 - 4:42pm IST | Place: Mumbai | Agency: PTI

The BSE benchmark index Sensex today dropped by 240.10 points from record high levels, posting its
second biggest drop this year due to profit booking by investors and concerns that RBI may keep its policy rates high to control inflation.

Weak global trends following poor economic data in the US and China also impacted the market sentiment.

The 30-share index closed at 21,133.56 points, down by 240.10, or 1.12 % -- the biggest loss since January 2. The barometer had closed at record high levels in the previous two sessions on the back of strong corporate earnings.

Profit booking was triggered by RBI Governor Raghuram Rajan comments that inflation was a "destructive disease" that was forcing the bank to keep interest rates high, brokers said. "The point is inflation is hitting the growth in the long run. There can be no trade-off. There is need to bring
inflation down," Rajan had said yesterday.

The broad-based National Stock Exchange index Nifty fell by 78.90 points, or 1.24 %, to settle at 6,266.75.

"Markets did react to the weak economic data in China and US," said Dipen Shah, Head- Private Client Group Research, Kotak Securities.

Interest rate sensitive stocks suffered the most, with the BSE realty index dropping the most by 3.19 %.

Capital Goods index fell by 2.68 %, Consumer Durables index by 2.65 % and banking index by 1.88 %.

Among major Sensex losers, Bhel dropped by 3.39 %, Tata Motors by 3.26 % and ICICI Bank by 1.96 %. Among 30 Sussex shares, 27 declined.

Only three Sensex stocks -- Reliance Industries, NTPC and Bajaj Auto -- gained and saved the market from further fall.

Trading sentiment also dampened as drugmaker Ranbaxy Laboratories tumbled by 19.33 % after the US regulators banned it from producing or selling drug ingredients for the American market from a fourth plant in India.


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