Mumbai: Led by petro-chem giant, RIL, share prices suffered a sharp setback sending the sensex down by a whopping 76.89 points to close at 5175.16 at the Bombay Stock Exchange (BSE) today (Aug 11, 2004) on heavy selling by operators following soaring of international crude oil prices amidst expectation of further rise in inflation.

After a two-day gaining streak, the market suddenly turned so bearish that the top heavyweight, RIL ended with sharp fall despite positive news that the European Commission has approved the acquisition of the German speciality polyester manufacturer, Trevira, by the Indian company.

Majority of refinery stocks like ONGC, BPCL, HPCL, IOC, Chennai petro, Kochi Refinery and few others bore the brunt of large scale offloading and finished with sharp losses.

The BSE-30 share sensitive index opened firm at 5263.27 and touched a high of 5269.22. Later, it met with strong resistance and dropped to a low of 5159.53 before concluding at 5175.16, a sharp fall of 1.46 per cent. Operators seemed to have pressed panic sales in reaction to soaring crude oil prices in the international markets. Oil prices shot above $ 45 for the first time yesterday.

Foreign Institutional Investors (FIIs) also reported to be major sellers, especially in oil PSUs and cement shares, which showed the maximum fall, dealers said.

Rise in the interest rate by a quarter to 1.5 per cent by the US Federal Reserve on Tuesday (Aug 10, 2004) further aggravated the situation as this would lead to further slowdown in FIIs inflow, they added.