Wednesday July 27, 2011

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By Taru Sugandha  ( Assistant Editor )

An Indian man watches the BSE Sensex display on a giant TV screen

THE BSE Sensex fell for the second day on Wednesday (July 27) to a two-week low of 18,432, down 86 points as investors sold blue chips amid lingering impact of a sharp hike in RBI key rates and weak cues from overseas markets that are worried over US debt crisis.

Besides, investors were busy squaring positions ahead of tomorrow's (July 28) settlement of July derivatives contracts and first quarter results of state-owned power equipment maker BHEL, announced late Tuesday (July 26), were a dampener, brokers said.

Sensex, which fell 353 points on Tuesday (July 26) after RBI hiked key rates by 50 basis points, resumed trading on a higher note with the Bombay Stock Exchange 30-share barometer touching a  high of 18,578.55. However, it fell back to end at 18,432.25, down 85.97 points or 0.46 per cent.

The broad-based NSE 50-issue Nifty also declined further by 28.05 points or 0.50 per cent to 5,546.80.

Capital goods, power, banking and realty suffered the most for the second day on selling pressure. Heavyweight, such as RIL, ICICI Bank, L&T, SBI, Tata Motors and Hindalco were all down.

Power equipment maker, BHEL, plunged 4.40 per cent over yesterday's (July 26) slide of 4.46 per cent.

"RBI’s monetary policy seemed to take over the markets for yet another day. Interest rate sensitive stocks, along with heavyweight RIL, contributed to Sensex losses," said Shanu Goel, Senior Research Analyst at Bonanza Portfolio.

"Short covering ahead of the expiry led to slight recovery in the market during the last hour of the trading session. Market is likely to be volatile due to expiry of July derivative series tomorrow," she added.

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