Sensex drops 216 points before factory output, inflation data

[1]

The benchmark S&P BSE Sensex today fell 216 points in step with a weakening rupee ahead of industrial production and retail inflation data, registering the first drop in the six sessions since Raghuram Rajan took over as Reserve Bank of India governor.

Metals, banks, consumer durables and auto sector stocks declined as 23 of the 30 Sensex shares fell.

Infosys, Reliance Industries and ICICI Bank contributed the most points to the drop in the Sensex, while Tata Steel, BHEL and Hero MotoCorp were the biggest losers on the index.

While the index breached the 20,000 mark for the third day in a row, it failed to sustain those gains. The Sensex initially touched a high of 20,052.05 on the back of rising Asian stocks and later fell back to settle at 19,781.88, a fall of 215.57 points or 1.08 per cent.

In the previous five sessions, it added 1,762.79 points, or 9.67 per cent, amid optimism pegged on Rajan, who laid out a road map for his innings in the short term soon after taking over as RBI chief on September 4.

The 50-share CNX Nifty index on the NSE dipped 62.45 points, or 1.06 per cent, to 5,850.70. The SX40 on the MCX-SX ended at 11,734.34, down 104.25 points or 0.88 per cent.

“Market participants preferred to book some profits ahead of the July industrial production and August CPI,” said Amar Ambani, head of research at India Infoline. “The Fed policy meeting next week is also another important event.”

The US Federal Reserve is scheduled to meet on September 17-18 and may reveal further plans about its $ 85 billion monthly bond-buying programme.

FMCG giant ITC was in the limelight and firmed up 1.91 per cent. Second-line stocks continued to attract retail investors and outperformed the Sensex. The BSE-Midcap index fell 0.04 per cent and the BSE-Smallcap rose 0.25 per cent.

Foreign institutional investors bought shares worth a net Rs 586.50 crore on wednesday, as per provisional data from the stock exchanges.

Barring Japan, which closed lower, Asian stock markets finished with gains on signs of economic recovery in China and receding fears of a US strike on Syria.