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Overall, pharma and FMCG shares gained, while banking, metal and power shares lagged. Dealers expect the market to be volatile near term, depending on global liquidity flows.
Sun Pharma was the star performer among frontline stocks, gaining 7 percent to Rs 1066.10 after reporting better-than-expected fourth quarter numbers.
Tata Motors, Coal India, Cipla and Hero Motocorp were the other key gainers among large caps, rising between 1-3 percent.
GAIL, ICICI Bank, Tata Steel, Jindal Steel and Sterlite Industries were the main laggards, down between 1-2.5 percent.
Among midcaps, HDIL shares crashed over 7 percent after the company reported a net loss of Rs 280 crore for the March quarter.
Overall, pharma and FMCG shares gained, while banking, metal and power shares lagged.
Dealers expect the market to be volatile near term, depending on global liquidity flows. There is still uncertainty over the US Federal Reserve's stance on the monetary stimulus it has been providing in the form of bond purchases from banks
Last week, talk about the Fed beginning to cut back on its bond purchase program had triggered a collapse in equity markets globally.
According to a report by brokerage house Nomura, the Asian markets most vulnerable to the unwinding of the quantitative easing (QE) by the Fed are
"In India, we believe a reduction of QE purchases would be very negative in the short-term, but should bode well over the medium-term," the Nomura note said.
Amid the red flags, some brokerages are upbeat on the prospects for India.
Centrum Broking today said that India is on the cusp of a new bull market and the Sensex is likely to touch 25,900 by December 2014.
"On the fundamental side, this rally will be driven on the back of the recent correction in commodity prices (Oil & Gold), fall in interest rates and continuous efforts by the government to revive growth. The correction in commodities will lead to a cool-off in inflation and lead to deeper correction in deposit and lending rates," the Centrum report said.
HDIL shares crashed 7.1percent. Mumbai-based real estate developer said Mumbai International Airport (MIAL) served termination notice for slum rehabilitation project.
Indian equities are trading lower in afternoon trade due to fall in ICICI Bank, HDFC and TCS that fell 1.7 percent each. However, Sun Pharma after fourth quarter earnings and Tata Motors ahead of March quarter numbers continue to see buying interest.
Indian shares were trading lower in the afternoon trade led by selling in selective blue-ship stocks. Stocks will remain volatile ahead of the derivatives expiry tomorrow.
Arvind Sanger of Geosphere Capital Management is expecting moderate uptrend in the Indian market. He does not believe the Nifty could head lower to 5500.
The BSE Sensex is down 58.52 points or 0.29% at 20102.30, and the Nifty down 22.85 points or 0.37% at 6088.40. Sun Pharma shares extended gains to 7.84 percent on value buying after strong fourth quarter earnings and a 1:1 bonus issue.
BSE Sensex was trading marginally lower ahead of the derivatives expiry tomorrow. US and European market closed at fresh multi-year highs overnight while Asian shares posted muted gains in the morning trade.
The Indian rupee opened weak at 56.16 per dollar versus 55.96 Tuesday. The rupee was trading at its lowest level since June 28, 2012 on strong buying in US dollar.
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