Sensex erases early gains, down 93 points on food inflation

The BSE benchmark Sensex erased its early gains and tumbled 93 points at mid session today, reacting to a marginal hike in food inflation and the rise in key interest rates in RBI's monetary policy review on Tuesday.

The Bombay Stock Exchange benchmark Sensex, which rose 117 points at the outset, fell 93.77 points to 18,875.68 at 1230 hours following reports that the food inflation went up marginally to 15.57% for the week that ended on January 15, from 15.52% in the previous week.

The gauge had lost 182 points in the previous session after the RBI increased interest rates for the seventh time since March 2010 and boosted its inflation forecast.

The apex bank had also raised the inflation forecast to 7% by March 31, more than its earlier prediction of 5.5%, as food costs soared.

Similarly, the broad-based National Stock Exchange index Nifty fell by 27.20 points to 5,660.20 at the same time with stocks in healthcare, realty and metal sector recorded fresh losses.