Markets recovered in afternoon trade, amid volatility with index heavyweights Reliance, L&T and Bharti Airtel making smart gains for themselves. However, rate sensitives continued to reel under a worse-than-expected inflation number, which signaled a prolonged hawkish credit policy.
The BSE Bankex slipped from day's high as private banks gave up thier gains, while SBI rose nearly a percent.
November inflation has eased to 9.11% (MoM) versus 9.73 % in October. This was much higher than estimates as most experts were expecting inflation to drop below 9%.
A CNBC-TV18 poll had estimated it to be 8.93%.
The data shows food inflation tumbled to 8.54% in November from more than 11% in October, while fuel inflation increased to 15.48% from 14.79% and manufacturing inflation increased marginally, to 7.7% from 7.66%.
As mentioned earlier, major largecaps like ITC, Reliance Industries, L&T and Bharti Airtel gained 1-1.8%. Sun Pharma and JP Associates topped the buying list, rising 2-2.5%.
Among others, HDFC Bank, Infosys, HUL, Wipro and BHEL were marginally higher.
However, HDFC, Tata Steel, Coal India and Tata Power fell 1-2%. M&M, TCS, NTPC, ONGC, Hero Motocorp, Sterlite, DLF and Hindalco were down 0.3-0.8%.
The market breadth improved; about 1319 shares advanced while 1193 shares declined on the BSE.
The market breadth improved; about 1319 shares advanced while 1193 shares declined on the BSE.
At 12:18 hours IST : Inflation shuns hopes, market falls; HDFC, BHEL down
The market slipped sharply from day's high to trade lower post higher than expected inflation numbers. Inflation for the month of November came in at 9.11% as against 9.73% in October and 8.2% in a year ago period. Experts had expected that it would fall below 9%. The Sensex was down 73 points at 15,929 and the Nifty fell 25 points to 4,775.35.
The BSE Bankex turned flat after rising 1.5% on hopes that inflation would fall. ICICI Bank was down 0.5% while HDFC Bank and SBI were flat. HDFC tanked 1.5% as RBI may not think of cutting interest rates in the policy to be scheduled on Friday.
Infosys, Reliance, ONGC, TCS, Tata Motors and BHEL were down 0.5-1%. Tata Steel, M&M, Hero Motocorp, Coal India, Hindalco, DLF and Sterlite fell 1.2-2%.
However, ITC, Sun Pharma, Bharti and JP Associates gained 0.5-1.7%.
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