SENSEX RECORDS SECOND CONSECUTIVE FALL

Falling for the second session, the benchmark Sensex and Nifty today closed at their lowest levels in over ten days as the rupee weakened to the below 60-level and rising crude price added to concerns about inflation which surged to five-month highs. The benchmark S&P BSE Sensex declined 37.69 points, or 0.15 per cent, to end at 25,190.48 and the NSE CNX Nifty ended 8.55 points, or 0.11 per cent, down at 7,533.55. Rising tension in Iraq which drove oil prices to 9-month highs and increase in wholesale inflation weighed on stocks. Costlier crude is a double whammy for the Indian economy, which imports 80 per cent of oil supplies, as trade gap widens and threatens to push inflation higher. This will reduce room for RBI to lower lending rates in a bid to boost growth. The Wholesale Price Index-based inflation accelerated to 6.01 per cent in May from 5.20 per cent in April. Shares from capital goods, auto and banking suffered losses while realty, IT and consumer durable closed up. Selling in bluechips like RIL, L&T, HDFC, ICICI Bank, Tata Motors, Axis Bank, M&M, SBI and Maruti Suzuki mainly contributed to the Sensex fall. Jignesh Chaudhary, Head of Research, Veracity Broking Services said: "Equities closed weak as WPI rose. Adding to the data, already it has been declared that we may witness disappointing rains this season, which will add more burdens to the already higher food prices. Also, the tension in Iraq has already pushed up fuel prices". The BSE 30-share barometer resumed nearly stable and moved erratically in negative terrain for most of the day before settling at 25,190.48, recording a fall of 37.69 points or 0.15 per cent. This was its weakest closing since 25,019.51
on June 5. Last Friday, it had plunged 348.04 points. On the other hand, IT stocks caught buyers' fancy after the rupee dipped below the 60 mark against the dollar. Bucking the overall negative trend, IT index gained 1.54 per cent with all the three top IT stocks TCS, Infosys and Wipro ending higher.