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  • Sensex falls 493 pts; dips below 20k level

    Published on January 7, 2011

    The BSE benchmark Sensex on Friday dropped 493 points to close below the psychological 20,000 level, as investor continued to off-load holdings for the fourth day in a row, concerned over the strong possibility of interest rate hike to reign in inflation.

    The Bombay Stock Exchange benchmark Sensex, which lost 375 points in last three sessions, plunged by another 492.93 points to 19,691.81, the lowest since 15th December.

    Intra-day, it had dipped to a low of 19,629.22 triggered by a steep fall in stocks of metal, auto and IT sectors.

    Similarly, the broad-based National Stock Exchange index Nifty fell below 6,000 points level, losing 143.65 points, to 5,904.60. It touched an intra-day low of 5,883.60.

    Selling pressure gathered momentum on fears of hike in interest rates to curb surging food inflation.

    RBI deputy governor said food inflation is “worryingly high”, even as the finance minister asked states to improve supplies to help slow price increases.

    These comments came on the heals of the International Monetary Fund saying the RBI may have to keep raising interest rates to curb the pace of price increases.

    Marketmen said investors were worried that the hike in interest rates will have a negative impact on industry and might slowing down economic growth.

    A weak trend in the Asian region and lower opening in Europe further influenced the market sentiment.