Home / Business / Sensex dips below 19K on rate hike worries

Sensex dips below 19K on rate hike worries

Mumbai: The BSE Sensex fell below the crucial 19,000 points level for the first time since late November 2010, with lenders leading the fall, as accelerating inflation cemented expectations that the Reserve Bank may hike interest rates.

The Bombay Stock Exchange benchmark Sensex closed down by 322.38 points or 1.68 per cent to 18,860.44 points.

The broad-based National Stock Exchange index Nifty also ended lower by 97.35 points or 1.69 percent to 5,654.55 level.

Brokers said continued offloading of positions by funds, particularly, in banking and realty stocks amid fears of a interest rate hike this month by the RBI to curb inflation, dampened the trading sentiment here.

The overall inflation for December, measured on the basis of wholesale prices, increased to 8.43 per cent in December, from 7.48 per cent in November.

The Reserve Bank is widely expected to hike key policy rates by 25-50 basis points in its quarterly monetary policy review meeting on January 25.

RBI raised key policy rates six times last year. But it paused its rate hiking spree in November review.

Food inflation has remained high through December touching the year high level of 18.32 per cent. It finally eased somewhat for the week ended January 1 to 16.91 per cent.

“Unless there is some substantial decline in the food prices in the next two weeks, in my view, perhaps some tightening may be required,” Rangarajan said.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Pinterest