Sensex falls for second day after record; Tata Motors drag
Experts believe investors will remain cautious ahead of RBI monetary policy and Federal Reserve meeting next week. They continue to expect rangebound movement with a negative bias till these events take place.
December 11, 2013 / 18:46 IST
Moneycontrol Bureau
The market fell the second consecutive session on Wednesday after hitting record highs on Monday. Weakness in global peers on Fed tapering fears, likely contraction in October industrial output data and warning of downgrade by S&P caused selling pressure today. However, the market shrugged off narrowing in November trade deficit data.After a lot of struggle, the Nifty managed to close above the 6,300-mark amid pressure. It was down 24.95 points to 6,307.90 while the Sensex lost 83.85 points to close at 21,171.41.However, the broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices closing flat.Experts believe investors will remain cautious ahead of RBI monetary policy and Federal Reserve meeting next week. They continue to expect rangebound movement with a negative bias till these events take place."We are not likely to move higher from here in a hurry," Sangeeta Purushottam, founder and managing partner of Cogito Advisors said.According to her, the market will consolidate, but the elections outcome has provided a higher floor to the market. She does not expect it to fall dramatically, but trade in a range.Rating agency Standard & Poor's said India's sovereign rating may come under pressure if general elections due by May next year end up with a hung parliament or with a government unable to push through reforms, reports Reuters.Economic dataIndia’s trade deficit narrowed to USD 9.22 billion in November versus USD 10.56 billion a month ago and USD 17.2 billion last year on the back of falling imports.Industrial output data, which will be announced on Thursday evening, is expected to weak for October. According to a CNBC-TV18 poll, index of industrial production may see a contraction of 1.2 percent as against growth of 2 percent in September, driven by weak mining and electricity, along with a lower manufacturing growth due to high base effect.Stocks in actionTelecom, capital goods, oil & gas, pharma and Tata pack saw selling pressure today while FMCG and HDFC twins capped the fall.Tata Motors plunged 3 percent to Rs 377.80 apiece after its subsidiary Jaguar Land Rover increased capex guidance for FY15 that will put pressure on debt and free cash flow of the company.State Bank of India declined 2.6 percent to Rs 1,796.70, in addition to a 2.6 percent fall in previous session after the government approved its proposal to raise Rs 9,576 crore via qualified institutional placement.Telecom operators, too, were under pressure with the Bharti Airtel, Reliance Communications and Idea Cellular falling between 2-3 percent.Shares of Larsen and Toubro, TCS, ONGC, Hero Motocorp, Tata Steel, BHEL and Tata Power lost 1-2 percent.However, NTPC bounced back, gaining 2.5 percent after Tuesday's 11 percent slide as the management reassured investors that changes will be made in the CERC draft guidelines and impact of other elements barring tax arbitrage is positive for the company.Shares of state-run coal mining company Coal India rebounded in last hour of trade, rising 1.2 percent as experts believe the penalty of Rs 1,773 crore slapped by Competition Commission of India will have minimal impact on the company’s financials.Among others, HDFC and ITC were up 1 percent each.In the broader space, Bharti Infratel gained nearly 4 percent as analysts say the deal between Reliance Jio and Bharti Airtel for telecom infrastructure sharing is positive for the company and incumbent wireless operators.Heineken International moved faster in its bid to control United Breweries that gained 2 percent. Heineken hiked its stake by 1.3 percent via open market purchases, which now holds more stake (38.87 percent) in UB than promoters. UB Holdings surged 7 percent.Rice stocks like Kohinoor Foods, KRBL and LT Foods rallied 5-10 percent on reports that Qatar Tenders will buy 24,000 tonne rice from India.Lanco Infratech gained 6.5 percent as sources say lenders approved company's corporate debt restructuring (CDR) package. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
