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Sensex Falls 100 Points, Nifty Below 8,350; BPCL, HPCL Under Pressure

Sensex Falls 100 Points, Nifty Below 8,350; BPCL, HPCL Under Pressure

BSE Sensex and Nifty gave up early gains on profit-taking seen in banking, and realty stocks. Shares of oil retailers were under pressure after hike in excise duties.

In early trade, markets rose close to record highest, boosted by positive inflation and factory output data. The Sensex in early trade rose nearly 120 points to hit 28,126.48 at day's high while Nifty inched up to 8,415.

In economic data released yesterday, retail inflation, which the Reserve Bank of India (RBI) tracks in setting lending rates, slowed to a record low of 5.52 per cent in October from 6.46 per cent a month earlier, helped by slower annual rises in food and fuel prices.

Industrial output grew a better-than-expected 2.5 per cent year-on-year in September, its fastest pace in three months, helped by a rebound in the capital goods sector, separate government data showed.

Indian markets have set a series of new highs since the third week of October, aided by strong foreign inflows and positive momentum from the government's reform measures. Foreign institutional investors have pumped in close to Rs 10,500 crore since October 20.

Mehraboon Irani, principal & head at private client group business at Nirmal Bang Securities, said positive macro-economic data is raising expectations of a RBI rate cut in the first quarter of next year. Besides that stimulus measures announced by the Bank of Japan and the fall in oil prices is perking up sentiment about Indian markets.

Dr. Arvind Virmani, former chief economic adviser of government of India, said inflation is on a downward trend with data showing across-the-broad slowing trend in price rise.

At 2:45 p.m. the Sensex was down 100 points to 27,908 while Nifty fell 37 points to 8,346. Bank of Baroda and PNB fell over 1 per cent after the recent outperformance of banking stocks on rate cut hopes.

BPCL was the biggest loser among Nifty stocks. The oil retailer fell over 4 per cent after the excise duty hike on petrol and diesel. HPCL slumped over 5 per cent while Indian Oil fell over 2 per cent.