Reliance shares pull Sensex down 344 pts

By Our Special Correspondent

Mumbai, May 9: The Reliance stock cracked the market on Friday sinking the Sensex and the Nifty below their comfort levels of 17,000 and 5,000 respectively.

Reliance Industries lost Rs 138.50 down five per cent and Reliance Petroleum lost eight per cent on news that gross refining margins in Singapore had come down following the surging crude prices. "This was a slightly exaggerated reaction to the GRM and the currency devaluation," said Mr Deven Choksey, managing director, K.R.Choksey.

The Sensex tanked below 17,000 level on opening bell but recovered slightly only to tank again after the inflation figure were announced at 7.61, higher than the previous week. The Sensex never recovered and lost over 100 points more in the last hour of trade to close at 16,737 down 344 points.

"The bias of the market is downwards," said Mr Daljeet Singh Kohli, head, equities, at Emkay Shares and Stock Brokers.

The market had gone up last week in a euphoria because there was no bad news coming in, but negative factors continued to exist such as inflation, global financial crisis and valuations were stretched.

Analysts feel the demand of the political parties to put a special cess on private oil companies and the intervention in steel and cement prices is hurting investors.