Stocks retreat on global rout, Nifty ends below 10,500

Mumbai, Feb 9 (PTI) Stocks tripped over the growing worries about rise in interest rates and a global rout in equities today, with the benchmark Sensex falling over 1 per cent to close at a one-month low and the broader Nifty crashing below the 10,500 level.

The 30-share Sensex closed lower by 407.40 points or 1.18 per cent at 34,005.76. This is the weakest closing since January 4 when it had ended at 33,969.64.

The broad-based Nifty fell by 121.90 points or 1.15 per cent to end at 10,454.95.

On weekly basis, the BSE Sensex recorded a steep fall of 1,060.99 points or 3.02 per cent while the broader Nifty lost 305.65 points or 2.84 per cent -- their worst weekly fall since August.

"Trend in global interest rates and the subsequent impact on inflation, global economic growth as well as flow of funds, influenced investor sentiment through the week," Karthikraj Lakshmanan, Senior Fund Manager Equities, BNP Paribas Mutual Fund.

"A second straight weekly decline in jobless claims in the US pointed to a strong job growth momentum in the economy, thus perpetuating fears of higher inflation and consequently faster rate hikes in the US."

Rising global rates are likely to impact the flow of funds to riskier assets like emerging markets, experts said.

The sell-off followed another battering for Wall Street, where the benchmark Dow suffered its second-biggest daily points fall.

Banking and financials stocks took a beating on emerging concerns over interest rate hike following rise in bond yields. Both BSE Bankex and Nifty Bank indices dropped up to 1.76 per cent.

Yes Bank and ICICI Bank plunged by 2.84 per cent and 2.33 per cent, respectively.

Other laggards were HDFC Ltd, Infosys, Axis Bank, Kotak Bank, Bharti Airtel, SBI, Wipro, Tata Motors, HDFC Bank, Adani Ports, L&T, IndusInd Bank, Hero MotoCorp, Maruti Suzuki, Bajaj Auto, ITC Ltd, RIL, M&M, ONGC and NTPC which dropped up to 2.13 per cent.

In contrast, Tata Steel, Asian Paint, Dr Reddy's, TCS, Hindustan Unilever and Coal India emerged gainers by surging up to 1.83 per cent.

Sector-wise, the BSE banking index declined the most, losing 1.75 per cent, followed by finance 1.54 per cent, telecom 1.15 per cent, auto 0.95 per cent, teck 0.90 per cent, IT 0.77 per cent, capital goods 0.73 per cent, oil & gas 0.72 per cent, infrastructure 0.60 per cent and PSU 0.50 per cent.

While metal, realty, power and consumer durables ended higher.

Broader markets, however depicted a mixed trend as the mid-cap index fell 0.09 per cent, while small-cap up 0.23 per cent.

In the Asian region, Japan's Nikkei down 2.55 per cent, Hong Kong's Hang Seng fell 1.09 per cent, while Shanghai Composite Index up 0.73 per cent. PTI SUN KPS DP MR