Sensex sheds 104 pts as banks, power stocks drop

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The Sensex on Monday fell by 104 points to 17,678.81 on selling in banks, capital goods, metal and power shares amid the logjam in Parliament entering its second week over the coal block allocation issue.

The BSE benchmark index opened flat on weak Asian cues but kept sliding down as selling in interest-rate sensitive shares as well IT stocks increased. Besides weak hopes of any immediate reduction of lending rates by RBI, a lower opening in European shares also spoilt the sentiment.

After dropping to day's low of 17,662.21, Sensex closed at 17,678.81 - down 104.40 points, or 0.59 per cent over Friday's closing. Across the market, 1,790 stocks closed with losses, wiping off investor wealth worth Rs 42,000 crore on Monday.

Refusing to be on the back foot on coal block allocation, Prime Minister Manmohan Singh on Monday rejected the CAG's observations as ‘misleading’ and ‘flawed’ and blamed the Opposition for thwarting his government's efforts to bring a policy of competitive bidding.

"While the concerns over the deficit rainfall may now be waning, the debate over the CAG report on coal continues to haunt the political scenario," said Milan Bavishi, Head - Research, Inventure Growth & Securities.

A fall in key stocks on the 30-share index including State Bank of India, ICICI Bank, Infosys, L&T, Jindal Steel and BHEL kept the Sensex in negative zone throughout.

Losses would have been sharper if it was not for gains in RIL, Bajaj Auto, M&M and Cipla, said traders. Profit-booking ahead of the expiry of August derivatives on Thursday also dampened the sentiment, a broker said.

The rupee, which was last trading weaker by 10 paise at around 55.60 a US dollar in spot market, also did not provide any relief to stock market, said experts.

The BSE-Realty sectoral index was the biggest loser as it ended 2.42 per cent down with stocks of Unitech, Indiabulls Real Estate, DLF, HDIL and Prestige Estate ending lower. The 50-share NSE Nifty index also declined by 36.45 points to end at 5,350.25.