Sensex slips 45 pts ahead of RBI policy

Mumbai: The BSE Sensex slipped 45 points to close at 15,836.47 today, ahead of RBI`s monetary policy review tomorrow and the rupee sliding to a new low amid weak cues from Asian markets. Fag-end buying, on the back of a sharp fall in food inflation to nearly 4-year low, erased some early losses.

FIIs, main market movers, continued selling shares. They offloaded stocks worth Rs 140.13 crore yesterday as per the provisional data from the stock exchanges. Besides, advance tax payouts by leading Indian corporates mostly remained flat in the third quarter, suggesting that the slowdown is impacting their bottomlines.

The BSE 30-share index opened lower and dropped further to a 3-week intra-day low of 15,596.22 due sustained capital outflow of foreign funds and weak Asian cues. It recovered much ground but settled at 15,836.47, down 44.67 points or 0.28 per cent.

Analysts said the weakening rupee aided sell-off on fears that it may hit profits of a large number of companies on accounts of costly imports. It tumbled 61 paise to record low of Rs 54.32 per US dollar in early trade on sustained demand for the American currency and persistent capital outflows.

They said investors were also cautious ahead of the Reserve Bank`s policy review tomorrow as the overall inflation is still high at over 9 per cent, although the broad consensus is that it may not hike key rates further. RBI has raised rates 13 times since March 2010 to tame inflation.

Meanwhile, the food inflation dipped to 4.35 per cent for week ended December 3 from 6.6 per cent in the previous week. "Market participants are awaiting the RBI policy meeting`s outcome. After weak IIP numbers and high inflation data, it is widely expected that RBI could soften its stance and could look forward toward monetary easing now or in near future," Milan Bavishi Head Research Inventure Growth and Securities said. .

The NSE 50-share index Nifty also lost 16.90 points or 0.35 per cent to 4,746.35. Asian markets remained weak amid continuing uncertainty over the euro-zone debt crisis and apprehensions of global economic slowdown. Key indices in China, Hong Kong, Japan, Singapore, South Korea and Taiwan fell by up to 2.28 per cent.

European markets were, however, firm in early trade with indices in France, Germany and UK gaining up to 0.33 per cent. Of the 30 Sensex scrips, 17 ended with losses. Major loser were Sterlite (3.96 per cent), Bharti Airtel (3.40 pc), BHEL (2.48 pc), Tata Motors (2.35 pc), SBI (2.25 pc), Wipro (2.23 pc), Larsen (2 pc), Maruti Suzuki (1.57 pc) and M&M (1.48 pc).

However, Tata Power firmed up by 4.09 pc, followed by Coal India – 3.83 pc, HUL – 2.80 pc, NTPC – 2.02 pc, Jaiprakash – 1.48 pc, Cipla – 1.15 pc, HDFC – 1.05 pc, Jindal Steel – 1.02 pc and RIL – 0.94 pc. Among the sectoral indices, the BSE-Capital Goods fell 1.91 pc, Consumer Durables – 1.62 pc, Auto 1.23 – pc and the Bankex by 0.98 pc. However, FMCG moved up 0.61 pc, Power – 0.56 pc and Oil & Gas – 0.46 pc.

Small cap and Mid cap indices were down 1.52 per cent and 1.11 per cent. The total market breadth on the BSE continued to remain negative as 1,829 stocks ended with losses, while 885 stocks finished with gains. Total turnover improved to Rs 2,041.89 crore from Rs 1,929.75 crore yesterday.