Sensex, Nifty continue to drag; infra, metals laggrads

Moneycontrol Bureau1:45 pm FII view: US financial markets are riding on expectations that US President-elect Donald Trump will pass a big fiscal expansion package that will not only induce a pick-up in US business cycle but also lengthen it for several quarters, according to Ajay Rajadhyaksha, Managing Director and Global Head-Macro Research, Barclays.

Markets have already factored in rate hike by US Federal Reserve, however, today’s FOMC meet may be non-event, Rajadhyaksha told CNBC-TV18. US employment rate is full and rates are at near-crisis levels, thus a rate hike is very much on the cards, he said.

1:30 pm European markets: Markets in Europe opened lower on Wednesday as investors focus on an upcoming rate decision by the US Federal Reserve.

The Stoxx 600 started 0.32 percent lower.

Analysts expect a rate hike of 25 points basis from the Fed with the announcement set to be after European markets close on Wednesday.

Meanwhile, Moody's updated its outlook on Italian banks from "stable" to "negative" on Tuesday on increasing capital needs and a weakening in confidence in the system.

Don't miss: Buy, sell, hold: 11 key stocks that analysts are watching out

The market is still under selling pressure as the Sensex is down 88.86 points or 0.3 percent at 26608.96. The Nifty is down 36.85 points or 0.4 percent at 8184.95. About 955 shares have advanced, 1469 shares declined, and 142 shares are unchanged.

Axis Bank, Reliance, Asian Paints, Tata Motors and Wipro are top gainers while Coal India, ONGC, Hero MotoCorp, Cipla and Adani Ports are losers in the Sensex.

Current account deficit is likely to worsen further in the second half of the current financial year and is expected to be around USD 10 billion for FY17, says a Citigroup report.

According to the global financial services major, besides the widening of trade deficit in goods, the recent trend of decline in software services exports and private remittances has continued. "CAD is likely to worsen further in H2 (second half) and we expect FY17 (2016-17) CAD at USD 10 billion, with risks skewed to the upside," Citigroup said in a research note.