Sensex, Nifty sluggish; Tata Motors, ICICI, Axis Bank gain

Moneycontrol Bureau11:46 am GDP growth: Tanvee Gupta Jain of Macquarie Capital Securities said that there could be short-term pain in the next couple of quarters owing to a dip in consumer discretionary spends. She was referring to the impact of demonetisation on the economy. She expects a 30-50 bps downside to their GDP estimate of 7.4 percent for FY17.  

Gupta expects the RBI to carry out 50-75 bps rate cuts over the next twelve months. She is seeing a higher probability of 25 bps cut in RBI’s December policy.

If the FOMC is cutting policy rate, it will lead to risk aversion, she said.

“We are confident there is scope for more policy rate cuts to balance growth and inflation.”11:32 am Oil Update: Crude oil futures dropped after official inventory reports indicated a larger-than-expected build in US oil stocks.

Crude inventories in the United States rose by 5.3 million barrels in the week to November 11, compared with expectations for an increase of 1.5 million barrels.

The climb in inventories was mainly due to higher imports that averaged 910,000 barrels per day (bpd), according to data released by the US Energy Information Administration on Wednesday.

US benchmark WTI crude was down 0.24 percent, at USD 45.46 a barrel. Brent crude futures fell 0.24 percent, to USD 45.52 per barrel.11:15 am Demonetisation effect: Pawan Munjal of Hero Motocorp saysdealers saw 50 percent drop in sales in the first 2 days of demonetisation but after that sharp decline, dealers saw almost 50 percent rise in sales.Also read - Market looks oversold, rebound rally likely, says CLSA11:00 am Market Check

Equity benchmarks remained lacklustre due to lack of domestic as well as global cues. Current consolidation suggested that so far, the market seems to have priced in the effect of demonetisation on equities. Now the street will closely watch its effect on Q3 earnings of auto, FMCG, consumer durables, cement and retail etc, which will be announced in January.

The 30-share BSE Sensex was up 37.14 points at 26335.83 and the 50-share NSE Nifty gained 5.30 points at 8116.90. The market breadth remained weak as about 1254 shares declined against 934 advancing shares on the BSE.

Tata Motors was the biggest gainer on the Sensex, up 2.6 percent followed by ICICI Bank, Axis Bank, ONGC and Cipla with over a percent gain.

PSU Banks continued to climb higher as deposits have been piling up after the government banned a legal tender of Rs 500 and Rs 1000 notes. Nifty PSU Bank index rose over a percent as Bank of Baroda, Canara Bank, Allahabad Bank, Union Bank, PNB, Bank of India, OBC and SBI gained 1-2 percent.