Oily threat for equity markets

By Our Correspondent

Mumbai, May 8: High crude oil prices continued to put pressure on the equity markets and saw the rupee skid to a one-year low of 41.79 against the dollar. With the Brent prices touching $122 and Nymex $123 there was heavy buying of dollars by banks on behalf of oil companies.

However, the falling rupee should have been seen as a blessing for the IT industry but it turned out to be a loss making day for IT stocks.

"It was purely profit booking in IT stocks, though the cautious guidance given by Cognizant that declared its results on Thursday, could have added to the selling," said Mr Deven Choksey, MD, K.R.Choksey.

The Sensex continued its losing streak for the fourth consecutive day and shed 259 points to close at 17,081. "It could open below the 17,000-mark on Friday" said Mr Bavesh Shah, vice-president, research, Asit C. Mehta.

"There are fears that inflation figures could hit 7.61 per cent on Friday, a three-year high. Crude oil is putting inflationary pressures and bringing sentiment down," he added.