The BSE barometer, which withstood pressure after RBI announced further tightening of money supply, collapsed to register its biggest single day fall since March 31, 2008.
MUMBAI: The markets nosedived on Friday with the benchmark Sensex closing at its near 14-month level after losing a hefty over 600 points on all-round selling pressure sparked by a lethal combination of inflation, interest rate hike and record crude prices.
The BSE barometer, which withstood pressure after RBI announced on Tuesday further tightening of money supply, collapsed to register its biggest single day fall since March 31, 2008. In the past two days Sensex had gained over 300 points.
The 30-share Sensex on the Bombay Stock Exchange settled the day at 13,802.22, lower by 619.60 points, or 4.3 per cent, from its previous close. The key index had not seen such a big fall since March 31, 2008 when it lost 726.85 points.
Marketmen said the statement from Finance Ministry that double digit inflation would linger on for some more time heavily impacted investor sentiment.
As investors resorted to aggressive selling across- the-board, heavyweight stocks Tata Motors and HDFC were battered and all sectoral indices ended in red.
Tata Motors was the biggest loser at 8.24 per cent, followed by HDFC at 8.15 per cent. M&M, Rel Infra and Wipro were the other blue-chip stock from Sensex club which lost heavily by over 7 per cent.
Sector-wise bankex and auto index closed lower by a major over 5 per cent after banks, notably SBI, on Thursday increased their benchmark prime lending rates.
Brokers said investors already dampened by inflation figure were panic after crude oil prices soared to record high of about USD 142 per barrel. They said investor concerns were further strengthened by weak global cues.
The Dow Jones Industrial Average fell by 360 points on Thursday on worries of US mortgage problems. While Asian indices ended lower by about 1.0 to 5.29 per cent on Friday, European markets were volatile and traded in the red in their early trade.
Global oil prices spurted to a record high of USD 141.98 per barrel in London on Friday after OPEC's president said they could reach USD 170 this year owing to a weak dollar and geopolitical unrest.
On domestic front, headline inflation stood at 11.42 per cent for the week ended June 14 against its previous week level of 11.05 per cent.
The 50-share S&P CNX Nifty of the National Stock Exchange dropped by 179.20 points or 4.15 per cent to close at 4,136.65 from its last close.
Brokers said leading rating agencies Standard & Poor's and Crisil lowered India's growth forecast attributing it to a strong surge inflation in the past couple of weeks.
While Tata Motors led the pack of all 30 Sensex losers. Besides,
The market breadth was extremely negative as 2,051 stocks registered losses while 601 others closed in green.
The trading volume was high at Rs 6,015 crore. RIL was the top traded scrip with highest turnover of Rs 540.26 crore, ACC (Rs 374.68 crore), Reliance Capital (Rs 308.50 crore), RPL (Rs 285.00 crore) and Tata Steel (Rs 258.38 crore).
The broad-based BSE-100 Index fell by 321.11 points or 4.25 per cent to 7,228.84 from its previous close.
The Bankex and Auto index dipped by more than 5.0 per cent while Power, Metal, Realty, PSU, IT and Capital Goods Indices dived by more than 4.0 per cent.
Revoking Amarnath order could disturb communal harmony: BJP
NEW DELHI: BJP on Friday said that the ongoing controversy relating to the transfer of forest land by the Jammu and Kashmir government to Shri Amarnathji Shrine Board could disturb communal harmony if the state administration revokes the allotment.
Citing "recent media reports" that "government might consider revoking the allotment on this issue", BJP president Rajnath Singh in a letter to Prime Minister Manmohan Singh said that "such a decision could lead to serious implications which in turn can vitiate communal harmony in the country."
He said that the decision to allot land to SASB was taken by the state Cabinet earlier this year. He told the Prime Minister that "by withdrawing the allotment the Centre could further send a signal that the Government has buckled under pressure and surrendered to tactics being applied by certain separatists and anti-social elements within the state."
Citing the example of Haj subsidy provided by the government, Singh said that if there is no opposition to it "then how can the government even appear to vacillate on a such a sensitive issue of allotting land to SASB."
The BJP chief said that "the government needs to ensure that it does not discriminate between any religion or community, when it comes to the issue of facilitating the devotion of millions of pilgrims."
Singh expressed hope that the government would consider all aspects of the issue and accordingly direct the J-K government to end the current impasse.
He said that the government's failure to resolve the crisis, "would not only snowball into a bigger controversy but can also further strengthen those elements who are inimical to the unity and integrity of India."
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