Sensex ends down 47 points on rate hike fear

Markets ended flat with a negative bias on Tuesday as investors turned cautious and booked profits in bank shares on fears that the RBI might hike key rates by over 25 basis points on the back of rising inflation levels.  

The 30-share Sensex ended down 47 points at 20,612 and the 50-share Nifty ended below its 50-DMA of 6,142 at 6,139 down 15 points.

The Indian rupee continued to remain weak against the US dollar due to fear of US Fed's tapering and dollar demand from importers.

At 3:50pm the rupee was trading at Rs 61.95 compared with  previous close of Rs 61.73 per dollar.

Asian markets ended mixed on Tuesday. Shares in Japan firmed up on the back of encouraging manufacturing data from the US and rise in business activity in the euro zone. Japan's benchmark Nikkei ended up 0.8% while Straits Times gained 0.5%. However, Hang Seng and Shanghai Composite ended down 0.2-0.4% each.

BSE Bankex was the top loser among the sectoral indices down 1.3% followed by Power, Realty, Oil and Gas. Meanwhile, Healthcare Index was the top gainer among the sectoral indices on the BSE up 1.5% followed by FMCG and Consumer Durables indices.

IT majors gained as the rupee continued to remain weak against the US dollar. TCS gained 1.4% while Infosys ended with marginal gains. IT services major Infosys today said it has bagged a contract from Chinese firm FESCO to develop a human resource (HR) services platform.

Bharti Airtel ended up 4.4% on reports that the company is likely to sell its Sri Lankan operations to UAE-based telecom major Etisalat.

ITC ended up 0.8% after the recent correction post high inflation data.

Other Sensex gainers include, Dr Reddy's Labs, Sun Pharma, Cipla and L&T.

HDFC Bank was the top Sensex loser which ended down 3.6% after the Reserve Bank of India (RBI) barred foreign institutional investors (FIIs) from purchasing shares in the bank after their shareholding reached the maximum prescribed limit. Mortgage lender HDFC ended down 2% and PSU banking major SBI ended nearly 1% down.

Among other shares, Jet Airways staged a recovery today and ended up 2.3% at Rs 268 on value buying at lower levels after correcting from Rs 300 levels in the past few sessions following the enquiry by CCI.

Shares of IRB Infrastructure were up 1% at Rs 89 after the company said it was selected as a preferred bid for a section of National Highway - 211.

Apollo tyres stock surged 2.3% after Cooper Tire & Rubber Co on Monday lost its court bid to force Apollo Tyres Ltd to complete their proposed $2.3 billion merger. The Delaware Supreme Court dismissed Cooper's appeal against an earlier ruling that Apollo was meeting its obligations to reach new contract terms with unions at Cooper plants in Ohio and Texas.

Alstom T&D gained 2.3% to end at Rs 182, after the company announced that it has entered into an agreement for sale for its land in Bengaluru for Rs 120 crore.

In the broader market, the BSE Mid-cap and Small-cap indices were up 0.4% each.

Market breadth was slightly positive with 1,170 gainers and 1,045 losers on the BSE.