Rate hike fears haunt equity markets; Sensex slids over 80 points

Equities have continued their down run after opening on a flat note though tracking weak global markets, where stocks traded lower on economic concerns. As on the global front, Asian markets have further drifted lower, while the US futures are showing mixed trend. Back home, the 30 share index -Sensex  on the BSE and 50 share index --Nifty--on the NSE are trading below 4 months low weighed down by the sustained selling pressure in the rate sensitive sectors which have tumbled ahead of the monthly inflation data. The markets focus is now clearly on monthly inflation data due by noon, as this is expected to give clues on how much the Reserve Bank would raise key interest rates. The expectation is that the wholesale price index in December probably will rise by 8.5 percent from a year earlier, accelerating from November's 12-month low of 7.48 percent. On the BSE sectoral space, stocks from Metal, Auto, Realty, Capital Goods, Bankex are showcasing considerable losses and are dragging the equity markets lower, while, bargain hunting in selected stocks of Information Technology, TECk and Consumer Durables counters are  capping the losses in the equity market. The broader indices following the pattern of their larger counterparts too have fixed themselves in the negative terrain. The overall market breadth on BSE is favouring declines which have overtaken advances in the ratio of 1285:1144, while, 97 shares remained unchanged.

The BSE Sensex is currently trading at 19,095.73, down by 87.09 points or 0.45%. There were 6 stocks advancing against 24 declines on the index.

The broader indices were trading in line with benchmarks; the BSE Mid cap and Small cap indices dropped down by 0.32% and 0.19% respectively.

Information Technology up by 0.57%, Consumer Durables up by 0.44% and TECk up by 0.41% were the only gainers on sectoral space on the BSE. While, Metal down by 1.35%, Auto down by 1.31%, Capital Goods down by 1.19%, Realty down by 1.11%, and Bankex down by 0.61%, were the prominent losers on the index.

The top gainers on the Sensex were Wipro up by 2.09%, RCom up by 1.59%, HUL up by 1.06%, M&M up by 0.79% and Infosys was up by 0.52%.

Tata Motors down by 3.38%, L&T down by 2.17%, Tata Steel down by 1.98%, HDFC down by 1.50%, Hindalco Industries down by 1.37% were the top losers on the index.

Meanwhile, the government has approved 19 foreign direct investment (FDI) proposals entailing a total inflow of about Rs.4,340.77 crore. According to a Finance Ministry statement, a meeting of Foreign Investment Promotion Board (FIPB) was held on Dec 31 based on whose recommendations the projects have been given the green signal.

The biggest proposal for FDI in the latest bunch of clearances was from Tata Steels which got a nod for issue of warrants worth Rs 1100 crore as part of its fund mobilisation plan. The US-based Federal Express has also got the permission for its Rs 607 crore investment in the business of courier, express transportation, logistics and warehousing services.

Another key proposal that was cleared was by the Future Ventures India which got go ahead for Rs.300 crore foreign funding. The proposal is for induction of foreign equity in investing company by way of issue and allotment of equity shares in the initial public offering (IPO) of the company to foreign institutional investors and NRIs under the portfolio investment scheme.

Among others proposals that were accepted is one by the Japan's Yorozu Corporation which will set up R 140 crore joint venture company to undertake the business of manufacturing of chassis, suspension parts and other automotive parts. Hindalco Industries' ex-post-facto approval for issuance of partly paid up shares as part of rights issue has also been approved. The proposal is worth Rs 508.63 crore.

The FIPB headed by Finance Secretary Ashok Chawla has rejected two FDI proposals, including that of B4U Television Network for induction of foreign equity to carry out business of up-linking a non-news and current affairs television channel. No reasons were given for rejection. The board also deferred decision on 16 FDI proposals, including those from Reliance Broadcast Network and Essar Capital Holding.

The S&P CNX Nifty is currently trading at 5,717.25, down by 34.65 points or 0.60%. There were 12 stocks advancing against 38 declines on the index.

The top gainers of the Nifty were Wipro up by 2.40%, Reliance Communication up by 1.59%, HCL Technologies up by 1.45%, Siemens up by 1.34% and Hindustan Unilever was up by 1.09%.

The top losers of the index were SAIL down by 4.93%, Tata Motors down by 3.65%, Ambuja Cement down by 2.94%, Axis Bank down by 2.71 % and ACC was down by 2.44%.

Asian markets were trading mostly in the red; Shanghai Composite was down 0.94%, Jakarta Composite declined 1.12%, KLSE Composite shed 0.16%, Nikkei 225 trimmed down by 0.64%, Straits Times dropped 0.77% and Taiwan Weighted slid 0.07%.

On the flip side, Hang Seng up by 0.24% and Seoul Composite up by 0.73% were the only gainer in the Asian pack.

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