Sensex falls sharply on global cues

Persistent all-round selling in view of sharp fall in global markets coupled with a cut in the growth forecast of the domestic economy pulled the BSE benchmark Sensex down by another 275 points to finish at 16,213.46.

Finance Minister Pranab Mukherjee said surging food and fuel prices amid weak global economic growth are adversely impacting GDP growth of the country.

The Centre on Friday said it will not be easy to restrict the fiscal deficit to 4.6 per cent in 2011-12 due to uncertainty on the disinvestment front and a likely increase in subsidies, but maintained that the slippage will be minimal.

Selling was so strong that all sectoral indices ended lower in a range of 0.06 per cent and 2.58 per cent.

Heavy sell-off was seen in capital goods, auto, refinery, power, realty, FMCG and banking sectors.

The BSE benchmark Sensex resumed lower at 16,258.44 and dropped further to 16,142.32 before ending at 16,213.46, a net loss of 274.78 points, or 1.67 per cent, from its previous close. On Thursday,, it had tumbled by nearly 389 points or 2.30 per cent.

Asian shares ended lower after closely-watched European Union summit which failed to complete the full backing of the 27 nations for treaty changes to help fight the ongoing euro zone debt crisis. Key benchmark indices in China, Hong Kong, Japan, Singapore, South Korea and Taiwan fell by between 0.62 per cent to 2.73 per cent.