Markets snap winning streak, Sensex slips 150pts

Markets snapped its three-day winning streak on the back of significant losses in the banking and realty shares ahead of the RBI mid-term policy review tomorrow. Sagging Asian markets on the back of business sentiment survey in Japan and extended fall in the Hong Kong markets also weighed on the investor sentiment.

The Sensex notched marginal gains in the morning session to 19,818 owing dazzling debut of Manganese Ore India Ltd (MOIL), the stock zoomed to a high of Rs 591, but eventually ended the day at Rs 467, as against the issue price of Rs 375. Advance tax numbers for the December quarter also gave a fillip to the markets in late morning deals, as the Sensex rebounded and touched a high of 19,818. However, weakness in the Asian markets and fuel inflation concerns seeped in second half of the day, dragging the BSE benchmark index, the Sensex, to a low 19,571 - down 246 points from the day's high. The Sensex finally ended at 19,648 - down 151 points. In the process, the index broke its three-day winning streak wherein the index had gained 558 points.

The NSE Nifty closed at 5,892 - down 52 points.

Marketmen are expecting some move on the cash reserve ratio (CRR) and SLR (Statutory Liquidity ratio) front in the mid-term policy review tomorrow. "Our expectation is that the Reserve Bank of India (RBI) will keep rates unchanged in the policy review in December. The market is anticipating a possible cut in the CRR given the liquidity crunch," Aneesh Srivastava, CIO, IDBI Life Insurance said.

In the world markets, the Shanghai Composite Index closed down 0.5%, while Hong Kong's Hang Seng Index lost almost 2% due to heavy losses in Airline shares led by Cathay Pacific, Taiwan's main index fell 0.2%, Japan's Nikkei Stock Average was flat, and South  Korea's Seoul Composite was down 0.4%.

Japanese manufacturers' business sentiment worsened for the first time in nearly two years this quarter, the Tankan Survey revealed. The survey is an economic survey of Japanese business issued by the Central Bank of Japan, which is then used to formulate monetary policy.

Chinese Premiere Wen Jibao has commenced a three-day visit to India aiming to boost trade and pacify tensions between the two growth engines of the World. Reliance Communication is expected to sign a pact with Chinese Development bank for a $1.93 billion loan giving fillip to the stock. Reliance Communications was up 1% at Rs 129. Bharti Airtel was also up 1.2% at Rs 339.

Selling pressure was seen in the rate sensitive sectors on market buzz that RBI may make announcement about loans and funding given to real estate companies by banks in the mid-term policy review tomorrow. BSE realty and bankex dipped 3.5% each to 2,740 and 12,704.

Among auto stocks, Hero Honda dipped 5.4% after on reports that board has approved termination of Joint Venture with Honda Motors.

BSE IT index gained 1.5% to 6,399. Patni Computers rose 4.7% , followed by TCS, Infosys and HCL Tech.

OMCs continued to lead the gains after they hiked prices by Rs 2.95 per litre, however concerns that fuel & fuel products which have 14.9% weightage on the WPI basket may weigh on Inflation, dented sentiment. BPCL and HPCL jumped 3.8% each in trades.

DLF shed 5% at Rs 278. Jaiparaksh Associates slipped 2% to Rs 104.

ICICI Bank and SBI dropped 3.5% to Rs 1,078 and Rs 2,696, respectively. HDFC Bank was down 3.3% at Rs 2,161.

Among other losers, Jindal Steel, Bajaj Auto, Maruti Suzuki and Hindalco dropped in trades.

Meanwhile, Tata Motors added 1.25% to Rs 339. Tata Power and Sterlite were marginally in green.

BSE market breadth was negative. Out of 3,008 stocks traded, 1,920 declined while 946 advanced in trades.