Markets cautious ahead of FDI vote

Banks fall from day's high on rate-cut uncertainty

Indian shares traded on a cautious note in late morning trades on looming uncertainty over impending US fiscal cliff issue which may take world's biggest economy into recession and amid caution ahead of FDI vote in Parliament that will test the Congress-led UPA government's ability to push through key reforms.

At 11:25AM, the Bombay  Stock Exchange's Sensex fell 39 points to 19,301, while National Stock Exchange's Nifty-50 index declined 11 points to 5,868 in the late morning trades.

Investors were cautious ahead of the the outcome of Parliament voting on foreign direct investment (FDI) in multi-brand retail in today's session after Prime Minister Manmohan Singh's minority UPA government bowed to opposition pressure last week ending days of deadlock in Parliament.

Meanwhile, India's factory output accelerated to five-month high in November, beating analyst's expectations on back of surge in  export orders, data showed today.

Global risk appetite was slightly mixed as the stalemate in US budget talks offset the positive sentiments after China's official PMI hit a seven-month high for November.

The Hang Seng rose 0.25% to 21,976, Straits Times rose 0.17% to 3,075, Nikkei rose 0.5% to 9,497 while Taiwan Weighted gained 0.1% to 7,587.

MSCI's broadest index of Asia Pacific shares outside Japan rose 0.08% to 869.31 in Asian trades.

Back home, consumer durables, FMCG and banks sectors were leading decline while real-estate, metals and auto sectors led gains on BSE.

Bank shares fell from day's high after better-than-expected PMI data dampened hopes of monetary easing by the Reserve Bank of India in its  December 18 policy. HDFC Bank fell 2% while SBI and ICICI Bank fell from intra-day high and were up 0.8% and 0.2% on the BSE.

Among other key Sensex stocks, Bharti Airtel and ITC declined 1% each while among gainers, Mahindra and Mahindra and Maruti Suzuki surged 2% and 1.4% respectively in late morning trades.

Mahindra and Mahindra (M&M) is trading higher by around 2% at Rs 962 on the BSE after the company registered 18% year-on-year rise in auto sales at 48,143 units during November 2012.

The other notable stock movers include, MahasiS has rallied 5% to Rs 409 after information technology consulting and software firm said that it has signed a definitive agreement to acquire U.S.-based Digital Risk LCC, a mortgage management specialist, for $175 million.

Thermax has surged 7% to Rs 630 in morning trades after winning Rs. 503 crore EPC (engineering, procurement and construction) order from the state-owned company for setting up a captive power plant for its new 3 million ton per annum integrated steel plant in Central India.

Shares of L&T Finance Holdings, Thangamayil Jewellery and Money Matter Financial Services are trading lower by over 4% each after these stocks have transferred into trade-to-trade (T2T) segment as a part of surveillance measure with effect from today.

The BSE mid-cap and small-cap indices rose nearly 1% each.

The overall breadth is strong as 1,422 stocks have advanced while 980 stocks declined on the BSE.