Market still on slippery ground; inflation concerns linger on

New Delhi: The domestic indices turned choppy on Thursday after yesterday's rebound and settled with a marginal 25 points loss as weakening rupee and nagging inflation concerns reflected by the RBI's policy meet minutes dampened sentiment.

The S&P BSE Sensex ended at 33,819, down 25 points while the broader Nifty50 index settled at 10,383, down 15 points.

Besides, a weak trend in other Asian markets and the US Federal Reserve minutes indicating a possible rate hike also influenced trading movement on domestic bourses.

Meanwhile, in the February derivatives expiry, the Sensex tumbled by 2,230.94 points, or 6.18 percent; and Nifty declined by 686.95 points, or 6.20 percent.

The minutes from the Reserve Bank of India's February 6-7 meeting showed the monetary policy committee members were concerned about inflation as well as uncertainty about the strength of economic recovery.

Squaring-up of positions by participants on the last trading session of February series contracts in the derivatives segment on Thursday also had an impact on trading.

Investors remained cautious as the rupee depreciated by 34 paise to hit a fresh 3-month low of 65.10 (intra-day) against the dollar today at the forex market.

Vinod Nair, Head of Research, Geojit Financial Services Ltd, told PTI, "The US Fed's hawkish stance on future rate hike on account of improving economic activity and expiry led volatility in the domestic market impacted the sentiment. Rise in India's 10-year bond yield due to inflationary pressure and rupee depreciation is signalling cautious trade in near term."

The Sensex after resuming lower at 33,817.09 fell further to hit a low of 33,691.42 intra-day on foreign fund outflows.

But, investors covered up their short positions at lower levels due to end of February series in the derivatives segment, helping the gauge to recover most of the lost grounds to settle the session 25.36 points, or 0.07 percent, down at 33,819.50. During the session, the Sensex turned positive briefly and touched a high of 33,868.74.Yesterday, the 30-share index had gained 141.27 points.

Likewise, the 50-stock NSE Nifty finished 14.75 points, or 0.14 percent, down at 10,382.70 after shuttling between 10,340.65 and 10,393.15.
Foreign portfolio investors (FPIs) sold shares worth Rs 1,214.18 crore on a net basis, while domestic institutional investors (DIIs) bought equities to the tune of Rs 1,375.48 crore yesterday, provisional data showed.

Among Sensex components, Dr Reddy's topped the losers list by falling 2.19 percent, followed by ONGC 2.05 percent.

PowerGrid, Tata Motors, Maruti Suzuki, Axis Bank, Bajaj Auto, NTPC, Asian Paint, Bharti Airtel, RIL, Tata Steel, ICICI Bank, HDFC Ltd, ITC Ltd Hindustan Unilever, HDFC Bank, Hero MotoCorp, SBI and TCS too ended lower by up to 1.88 percent.

While Sun Pharma, Adani Ports, Kotak Bank, IndusInd Bank, M&M, Yes Bank, Infosys, L&T and Coal India ended higher and capped the losses.

Punjab National Bank (PNB) shares ended 2.09 percent down, while Gitanjali Gems continued to face selling presure for the seventh session in a row today, plunging 5 percent to hit a lower circuit.

It has tanked 58.5 percent in the past one week. On February 14, PNB disclosed that it detected fraudulent transactions with the financial implication of about Rs 11,346 crore.

While billionaire jewellery designer Nirav Modi, the alleged perpetrator of this fraud, is not directly linked to any listed company, his relative and business associate Mehul Choksi's Gitanjali Gems is a listed firm.

Sectors like, oil and gas fell by 1.46 percent, power (1.11 percent), PSU (1 percent), consumer durables (0.93 percent), auto (0.90 percent), infrastructure (0.59 percent), FMCG (0.34 percent), capital goods (0.24 percent) and metal (0.06 percent).

However, banking index managed to close in the positive terrain by rising 0.13 percent.

The broader markets too displayed a weak trend with the mid-cap index falling 0.54 percent, while small-cap index lost 0.43 percent.

In the Asian region, Japan's Nikkei fell 1.07 percent, while Hong Kong's Hang Seng was down 1.48 percent. European shares too were down, with Frankfurt's DAX declining 0.79 percent and Paris CAC 40 losing 0.51 percent. London's FTSE too fell by 1.02 percent. 

(With PTI inputs)