Sensex snaps gains, falls 56 points

The BSE benchmark Sensex Friday fell 56points on weak global cues and fund-selling on fears of more interest ratehikes to curb high inflation, even as smart gains by industry leader RIL andTCS capped its losses.

The 30-share Sensex, which had gained over 206 points inlast two trading sessions, fell by 56.28 points to 18,561.92 as inflationsoared to 9.44 per cent in June, raising concerns that RBI might again raiseinterest rates later this month to tame excess demand.

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Broad-based National Stock Exchange index shed 18.70 pointsto 5,581.10, with stocks of metal, realty and auto sector suffering losses.

Weak trend in Asia and lower opening in Europe following adecline in the USmarkets ahead of release of crucial stress test results of the Euro zone'stroubled banking sector also dampened the market sentiment.

Asian stocks dropped after international rating agencyStandard and Poor's said it might cut the US's credit rating and the FederalReserve ruled out immediate further bond purchases.

On the Bombay Stock Exchange's key index Sensex, TCS, thecountry's largest software exporter, bucked the trend, gaining 2.03 per cent toRs 1,148.05 a share after its first-quarter profit rose by 28 per cent,slightly above the market expectations. Market leader RIL also gained about 1per cent, capping the market losses.

Infosys, the second-heaviest scrip on the Sensex, fellmarginally for the third day after announcing its lower-than- expected marketquarterly results, losing 0.38 per cent to Rs 2,730.55 a piece.