Sensex, Nifty crack on profit booking; Maruti, Hero up 2%

Moneycontrol Bureau

1:40 pm Market outlook: The current rally is great chance for investors to exit the market, Sandeep Bhatia of Kotak Institutional Equities said. Fundamentally nothing has changed to warrant a market rally and will take around two-three years before things improve structurally, he told CNBC-TV18 in an interview.
Meanwhile, Bhatia, who prefers sticking to large caps now, is positive on auto players Tata Motors & Bajaj Auto. From the FMCG pack, he is betting on ITC as its volume growth looks robust. He is also looking to stay invested in oil and gas major RIL. From the midcaps, he is bullish on Glenmark Pharma.
Bhatia remains underweight on metals space. Also, he feels that the pressure seen on pharma player Ranbaxy is due to unwinding of short-term trades. USFDA has issued an import alert on the company’s Mohali unit pulling the stock down more than 30 percent today. It will take long time before things settle down for Ranbaxy, he added. Don't miss: RBI won't ease rates now; Re may end year at 65/$, says Deutsche Bank
Profit booking seeps in market on disappointing August wholesale price index (WPI) inflation which jumped to 6-month high at 6.1 percent month-on-month.
The Sensex is down 106.97 points or 0.54 percent at 19625.79, and the Nifty slips 45.40 points or 0.78 percent at 5805.20.  About 895 shares have advanced, 1177 shares declined, and 115 shares are unchanged.
C Rangarajan, Chairman, PMEAC is expecting inflation to be around 5.5 percent by the end of the current fiscal. "Food inflation will definitely come down and now that the rupee is stabilised, the imported commodities in rupee terms will also come down. Therefore going ahead we look forward to the smoothening or the inflation coming down," he said.
Maruti Suzuki, Hero MotoCorp, M&M, ICICI Bank, Bharti Airtel are major gainers in the Sensex. On the losing side are Sesa Goa, BHEL, Coal India, Tata Steel and TCS.
Meanwhile, global markets rally after Larry Summers pulls out of the race for Fed's top job. Most European and asian markets also trading about 1 percent higher.