Markets slip, rate sensitives weigh

Benchmark share indices ended nearly 1% lower on Wednesday as investors booked profits in rate sensitive shares after hopes of a rate cut remained elusive as inflation remained above the central bank's comfort zone.

The 30-share Sensex at the close was down 169 points or 0.85% at 19,818 and the Nifty gave up 55 points or 0.90% at 6,002.

The broader markets too cracked today, as both the smallcap and the midcap indices slipped 1.3% each.

After a flat opening, the markets continued to trade weak through the day as weakness in rate sensitives weighed on the indices.

Interest rate-sensitive fell as the Reserve Bank of India Governor D Subbarao stated that India's inflation has come off a peak but is still high, a comment that is likely to cool expectations for a rate cut later this month.

In Asia, shares fell on Wednesday as cautious investors waited for crucial economic data from China later this week, while the yen's extended gains spurred profit taking in Japanese equities after their recent rally.

Japan's benchmark Nikkei average shed 2.6% for its largest daily decline in eight months, sharply reversing Tuesday's rally.

The other major losers were Shanghai Composite and Taiwan Weighted down 0.7-0.8%.

Back home, on the sectoral front, all the indices except Oil & Gas, closed in the red.

Auto, Metal, Banks, Realty, Capital Goods, PSU and Power indices closed down 1% each.

Meanwhile, Oil & Gas index gained 0.3% on the back of gains in Reliance Industries ahead of its Q3 numbers, which closed up 1.6% at Rs 859.50.

All

the major auto scrips were in the red. Tata Motors slipped over 3% after the company said that its global sales in December 2012 declined by 13.88% to 98,968 units against 114,920 units sold during the corresponding month in 2011.

Bajaj Auto slipped 2% after reporting almost 100 basis point (bps) drop in operating margin for the third quarter ended December 2012 as compared to the previous corresponding period.

Mahindra & Mahindra, Maruti Suzuki and Hero MotoCorp down 0.5-3% each were the other major losers.

In the financial space, SBI, ICICI Bank, HDFC and HDFC Bank gave off 1-2%.

Metal names like Jindal Steel, Hindalco and Tata Steel slipped 2-4%.

Some of the other losers among the Sensex-30 were BHEL, Tata Power, Sun Pharma, ONGC, L&T and Hindustan Unilever down 1-2%.

Among the gainers were Dr Reddys Lab, TCS up 1% each followed by NTPC and Gail India which added 0.2% each.

In other stocks, Strides Arcolab gained nearly 2% at Rs 1,081, extending its over 3% gain in past two-days, on reports that Pfizer Inc is among other companies in race to buy the company's injectable-medicines unit Agila Specialties.

Orient Refractories shot up 5.5% at Rs 38.75, after the Dutch firm Dutch US Holding B.V. made an open offer to acquire additional 26% stake in the company at price of Rs 43 per share.

The market breadth was negative. 1998 stocks declined while 942 stocks advanced on the BSE.