Nifty closes below 5450; Maruti, HDFC, DLF slips

Bombay Stock Exchnage

Markets ended in the negative territory as concerns of rising crude oil prices and expectations of more rate hikes kept the bulls under check. FMCG, IT and auto stocks were led the decline while power space ended marginally higher.

Indices opened with a gap-down mirroring losses in the Asian region, worries of high crude oil prices due to tension in the middle-east also weighed sentiments. The Reserve Bank of India's move to hike repo rate, reverse repo rate by 25 bps and keep the CRR unchanged was in line with market expectations.

"Indeed, with inflation for the month of February coming in as a rude shock to the market (the reading came in at 8.3% against expectations of 7.8% and on top of an upwardly revised estimate of 9.4% for December) at the start of the week, this is the very least the central bank could have done to assuage concerns on price pressures.

Expectations of a moderation in inflation in H1FY12 that the central bank had alluded to in its last policy statement in January are conspicuous by their absence. This along with the upward revision of the March estimate means that not only is the rate hiking cycle in FY12 now likely to be more extended than initially anticipated but is also likely to be far more front-loaded.

We expect inflation to print in at 8.1% in March, 2011 and move higher close to 9% by August, 2011. We see the RBI hiking its repo and reverse repo by another 25 bps in its Annual review in May and this is likely to be followed by 50-75 bps of rate increases through the fiscal year," said Abheek Barua, Chief Economist, HDFC Bank.

On the other hand, tension of public unrest in Libya, Yemen and Bahrain is keeping the oil prices higher.

Crude oil prices spiked by more than $2 per barrel and Brent crude for May contract was at $112.73.

Bombay Stock Exchange's Sensex ended at 18149.87, down 208.82 points or 1.14 per cent. The 30-share index touched a low of 18104.02 and high of 18354.27 intraday.

National Stock Exchange's Nifty closed at 5446.65, down 64.50 points or 1.17 per cent. The broader index touched a low of 5435.30 and high of 5510.05 in today's trade.

BSE Midcap Index was down 0.29 per cent and BSE Smallcap Index moved 0.38 per cent lower.

BSE FMCG Index was down 1.54 per cent, BSE IT Index fell 1.50 per cent and BSE Auto Index was down 1.27 per cent. BSE Power Index was up 0.22 per cent.

Maruti (-4.53%), HDFC (-3.42%), Hindalco (-2.17%), DLF (-2.16%) and Infosys Technologies (-1.70%) were the top Sensex losers.

Reliance Communications (3.20%), BHEL (2.16%), Ambuja Cement (1.73%), Cairn India (1.55%) and Reliance Capital (1.36%) were the top gainers.

Market breadth was negative on the NSE with 1645 declines against 1206 gainers.

Meanwhile, the European markets were in the positive terrain and the Wall Street stock futures indicated a similar opening. At 5:15 pm IST, Dow Jones futures was up 0.47 per cent, S&P 500 gained 0.71 per cent and Nasdaq moved 0.48 per cent higher.