Markets remain weak dragged by rate sensitives

Rate sensitive shares were among the top losers as investors turned cautious ahead of the RBI policy on Tuesday.

Benchmark share indices were trading nearly 1% down in late morning trades on Monday, amid weak Asian cues, with rate sensitive shares leading the decline as investors turned cautious ahead of the RBI policy on Tuesday.

At 11:40AM, the 30-share Sensex was down 172 points or 0.9% at 19,256 and the 50-share Nifty was down 48 points or 0.8% at 5,825.

Asian markets witnessed a sell-off after the Cyprus annouced that it would impose a one-time 10% tax on private bank deposits in exchange for equity shares in the bank, to avail credit of 10 billion euros from global lenders for shoring up the nation's financial position.

Coal India was the top Sensex loser down 5.6% at Rs 302 on reports that the government is planning to sell up to 10% of its holding in the world’s largest coal producer through the offer-for-sale (OFS) route. “The government is considering to offload up to 10% stake in Coal India through the OFS route in the next financial year,” the PTI report suggests.

Bharti Airtel was down 2.7% at Rs 302 ahead of the Delhi High Court (HC) decision on notice issued by the Department of Telecommunications (DoT) to the company to stop 3G services in seven circles. The DoT on Friday asked the telecom operator Bharti Airtel to stop 3G services within three days in the seven circles in which the company does not have the required license.

Rate sensitive shares were down after hopes of a rate cut faded with better-than-expected industrial growth in January even as retail inflation continues to remain in double digits for the third straight month.

Among the rate sensitive shares, financials were among the top losers. ICICI Bank was down 2.8%, HDFC and SBI were down 0.7%.

In the auto segment, Tata Motors, Mahindra and Mahindra and Maruti Suzuki were down 1-2% each.

Shares of software exporters continued to remain weak with Wipro, TCS and Infosys down 0.5-1% each.

Hindustan Unilever was the top Sensex gainer up 1.8% at Rs 466 followed by Cipla, Sun Pharma and Larsen & Toubro.

In the broader market, the Small-cap index was down 0.7% and Mid-Cap index was down 0.6%.

Market breadth was weak with 1,484 losers and 766 gainers on the BSE.