Sensex drops 139 pts, IT stocks fall

The Bombay Stock Exchange benchmark Sensex lost 139 points as funds resorted to intense selling after food inflation inched closer to double digits triggering fears that the Reserve Bank will hike interest rate again.

The 30-share index Sensex, which had lost 213 points in the previous session, further declined by 138.65 points to 16,146.33.

In volatile trade, the key index moved between 16,373.84 and 16,104.34 points.

Meanwhile, food inflation soared to 9.80 per cent for the week ended August 13 from 9.03 per cent in the previous week, sparking further selling even as global trends were positive.

Brokers said selling pressure was also aided by investors' winding up their pending positions on last days of the month ahead of expiry in the derivatives segment.

The broad-based National Stock Exchange index Nifty lost 49.30 points to 4,839.60.

The pull-down was led by Reliance Industries and Infosys, both together command 21 per cent weight in Sensex.

Reliance Industries fell by 0.87 per cent and Infosys 2.68 per cent.

Technology shares fell the most and the sectoral index lost a 2.07 per cent as investors were concerns that global slowdown will hurt corporate earnings. Indian software exporting companies get more than 50 per cent of their revenues from the U.S. and Europe.