Sensex falls 200 pts, Nifty below 7600; Lupin, Axis outperform

Moneycontrol Bureau10:35 am FII View: Ridham Desai of Morgan Stanley says the market has been entrenched in quality & growth and has disliked junk as well as value factors for most of the past 8 years.

According to him, recent market moves have produced some volatility in the performance of these factors and thus, volatility & poor headline market performance.

He thinks the market could beat the beginning of a transition into growth styles. "Our stock picking approach is to buy cyclicals and stocks with GARP (growth at a reasonable price) orientation, although, as usual, we avoid beta," Desai says.10:15 am Nomura on further rate cut: Reserve Bank is likely to hold the pause button until the end of this year, largely owing to inflationary pressures, a Nomura report has said.

However, domestic ratings agency India Ratings has said the central bank will deliver another rate cut of 0.25 percent this fiscal.

Nomura in a research note today said that it "expects RBI to stand pat until end-2016, as we do not see inflation undershooting 5 percent on a sustained basis as the cyclical factors driving disinflation (oil price falls, a slowdown in rural wage growth and the large negative output gap) are behind us." Though in its forward guidance, RBI had said the stance of monetary policy will remain accommodative, the Japanese brokerage firm expects rates to be on hold until year end.

Also read - Don't expect mindblowing Q4 earnings: Market expert10:00 am Market Check

Equity benchmarks extended losses with the Sensex falling over 200 points, weighed by banking & financials, FMCG, auto and technology stocks. The broader markets were flat.

The Sensex fell 206.96 points to 24693.67 and the Nifty declined 58.05 points to 7556.30.

HDFC dropped more than 2 percent on provisioning for the fourth quarter. Infosys, ITC, HDFC Bank, ICICI Bank, SBI and Maruti Suzuki declined 1-3 percent while Lupin, Axis Bank, Dr Reddy's Labs, ONGC, Cipla, Coal India and BHEL gained 1-2 percent.Market is giving signals that investors need to take money off the table across sectors regularly, Ajay Srivastava of Dimensions Consulting tells CNBC-TV18.He feels the recent rally has been driven by a combination of global liquidity flows and short covering if positions.According to Srivastava, fundamentals of the economy are still weak, though strong global liquidity could take stocks higher in the short term.