Inflation, poor European cues spook markets

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Inflation, poor European cues spook markets
Higher then expected inflation data for May and weak European markets saw share prices falling sharply today. The BSE Sensex closed the day lower by 202 points, while the NSE Nifty ended lower by 66 points at 5054 points.

Markets reacted negatively to inflation data that came in higher then expected at 7.55%. Analysts now marketmen believe that the RBI would not cut rates aggressively when it meets for its monetary policy review meeting on June 18, 2012.

Weak openings in European markets also affected sentiments negatively. The German DAX, the French CAC and the European FTSE all trading lower. Banking stocks were battered badly with State Bank of India, ICICI Bank and Punjab National Bank losing heavy ground.

Infrastructure major Larsen and Toubro also lost ground today, as analysts believe that a sharp drop in interest rates was unlikely affecting an infrastructure player like Larsen and Toubro.

Among the shares that gained in trade today were IT major Infosys, ACC, Cipla and BPCL. Markets are now expected to be volatile ahead of the RBI meet on Monday and also due to the elections in Greece which are slated for Sunday.

Read more about: sensex, nifty
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