Another weak day for the markets

The market drifted lower today, as a surge in inflation reignited worries of interest rates rising further. Caution on bourses around the globe, ahead of key US inflation data, also weighed on the sentiment. Nevertheless, it finished above the lower level due to recovery by index heavyweight Reliance Industries and some IT pivotals. Telecom, cement and banking shares edged lower.

The 30-share BSE Sensex lost 113.45 points (0.9%), to settle at 12,430.40.The S&P CNX Nifty shed 35.05 points (0.96%), to end at 3,608.55.

Today, Reliance Industries (RIL) firmed up. The stock was up 1.1% to Rs 1298.Banks fell but pared intra-day losses. HDFC Bank shed 1.3% to Rs 905, but was off the session’s low of Rs 890. The State Bank of India shed 0.8% to Rs 914, and was off the session’s low of Rs 845. ICICI Bank was down 1.8% to Rs 807, up from the session’s low of Rs 802. The Lok Sabha today passed the Banking Regulation (Amendment) Bill, 2007. The Banking Regulation (Amendment) Bill is aimed at allowing more operational flexibility to the Reserve Bank of India (RBI)in the conduct of monetary policy. The bill seeks to amend Section 24 of the Banking Regulation Act, 1949 to enable the RBI to specify the statutory liquidity ratio without any floor rate. At present banks are required to invest a minimum of 25% of their deposits in government securities, as dictated by the statutory liquidity ratio (SLR).

Reliance Communications dropped 4% to Rs 374.50.