Nifty slips below 5500, metals lose sheen

Nifty sliped below 5500 in the opening trade due to weak global cues and losses in metal shares. The S&P CNX Nifty was down 35 points, at 5496 and the Sensex was down 110 points, at 18,353.

Brent crude scaled back to 29-month high as Libyan crisis stoked supply concerns. OPEC (Organization of the Petroleum Exporting Countries) Ministers canceled the meeting to increase crude production citing ample of supply.

The markets have fallen almost 14% since the beginning of the year due to FII outflows of nearly $2 billion. Cameron Brandt, global markets analyst, EPFR Global expects rising crude prices will continue to impact India. "Higher oil prices, obviously, have implications for fiscal balances, inflation and production costs and India’s reliance on imported oil makes it hard to avoid some fallout from higher prices," said Brandt.

US Markets ended in the red on back rising oil prices. The Standard & Poor's 500-stock index slipped 0.1%, the Nasdaq Composite fell 0.5% and the Dow Jones Industrial Average edged marginally lower by 0.01%.

Most of the Asian markets were also trading in the red dragged down by losses in mining and metal shares. Hong Kong shares declined 0.4%, with life insurance and commodity related shares leading the losses. Japan's Nikkei Stock Average was off 1.1% as losses in US technology shares weighed and China's Shanghai Composite also shed 0.9%.

Back in India metal shares lost sheen following weakness in metal stocks globally, the BSE Metal index was down 0.8%. Sesa Goa was off 1.2%, JSW Steel fell 1.1% and Hindalco also declined 1.1%.

Investors cashed out of banks on anticipation of rate hike in the RBI policy next week. Axis Bank dipped 1%, Canara Bank declined 1.3% and ICICI Bank was off 1.2%.

Top losers on the Sensex were TCS, down 1.6%, ICICI Bank slipped 1.3%, and  State Bank of India fell 1.3%. Only four components on the Sensex were trading in the green, Tata Motors advanced 0.8%, Reliance Infra was up 0.5% and HDFC gained 0.2%.

Among individual stocks Kotak Mahindra Bank fell 1.4% after Mint reported that the bank has formed a three way partnership with Japan's SMBC (Sumitomo Mitsui Banking Corporation) and Brookfield Asset Management of Canada to lauch Rs 1,350 crore or $300 million infrastructure fund. Gokaldas Exports was up 13% on reports that Blackstone, a private equity giant will take management control of the textile exporter. GMR Infrastructure was trading flat, at Rs 40.5 after reports that three private equity funds may invest Rs 1,440 crore in GMR Airport, a fully owned subsidiary of GMR Infrastructure.

From the broader markets space midcap and smallcap indices were trading flat. Market breadth was positive, 646 stocks advanced for 632 stocks which declined.