Sensex, Nifty recover a bit; FMCG drags, infra stocks gain

Moneycontrol Bureau11:50 am Market check: The Sensex is down 111.74 points or 0.4 percent at 26107.17, and the Nifty slips 32.25 points or 0.4 percent at 7949.65. About 1231 shares have advanced, 967 shares declined, and 103 shares are unchanged.

Reliance, HDFC, Dr Reddy's Labs, NTPC and BHEL are major losers while Tata Motors, Maruti Suzuki and Axis Bank are top gainers in the Sensex.

11:45 am RBI to cut rates? The Reserve Bank of India is likely to cut interest rates by 25 basis points, noted economist Chetan Ahya of Morgan Stanley says, but adds that it would not be an "easy decision" to make. The recent volatility in emerging markets as well as weak monsoon, which could spike food prices, may weigh on the central bank's decision, he maintained. Morgan Stanley has cut India's GDP growth forecast by 30-40 basis points to 7.4 percent, compared to 7.3 percent last fiscal, which would correspond to 6.1 percent growth under the old series, Ahya told CNBC-TV18 in an interview.11:30 am Rupee check: The rupee gave up early losses, but was still trading down by 13 paise at 65.80 against the US currency in late-morning deals following a sustained bout of dollar demand from banks and importers amid weak domestic equities. The rupee opened sharply lower at 65.88 as against last Friday's level of 65.67 at the Interbank Foreign Exchange (forex) market. It moved in a range of 65.88 and 65.77 during the morning deals before quoting at 65.80 at 1030 hours.

The dollar index is currently trading down by 0.15 per cent at 95.09 as against a basket of six currencies. "The overnight equity sell-off will keep sentiment slightly weak. Dollar demand would come in from importers on dips to 65.55-65.60 per dollar. Any uptick towards 66 per dollar will see some exporter selling to hedge their receivables, a dealer said.

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The market continues to drag but recovers from early morning's sharp losses. The Sensex is down 82.45 points or 0.3 percent at 26136.46 and the Nifty slips 23.30 points or 0.3 percent at 7958.60. About 1176 shares have advanced, 837 shares declined, and 90 shares are unchanged.

Tata Motors, Maruti, Axis Bank, L&T and SBI are top gainers while  HDFC, Tata Steel, M&M, NTPC and Hindalco are among losers in the Sensex. FMCG index is down 0.6 percent from previous close.

Gold dipped slightly after a three-day rally, but the metal still held close its highest in nearly three weeks, as the Federal Reserve's move last week to leave US interest rates unchanged weighed on global equities.The Fed kept interest rates unchanged on Thursday in a bow to worries about the global economy, financial market volatility and sluggish inflation at home. It left open the possibility of modest rate rises later this year.

A majority of Wall Street's top banks now expect the Fed to begin increasing rates in December, according to a Reuters poll conducted on Thursday after the Fed's policy decision.