Nifty dips below 8,400 ahead of Trump's swearing-in; telecom stocks rise

Market fell even as China's Q4 GDP beat expectations and Fed took a less hawkish policy stance

The benchmark indices on Friday extended losses tracking cautious trade in global markets ahead of US President-elect Donald Trump's swearing-in ceremony later in the day even as China's fourth-quarter economic growth beat expectations and Federal Reserve Chair Janet Yellen took a less hawkish policy stance. 

At 01:05 pm, the S&P BSE Sensex was trading at 27,091, down 218 points, while the broader Nifty50 was ruling at 8,371, down 64 points.

"Going forward, momentum traders should continue with their optimistic stance as long as 8,397-8,370 support remains unbroken. On the flipside, the immediate and strong resistance for Nifty is seen around the downside gap area of 8,460-8,510 created on November 11, 2016," said Angel Broking in a technical note.

Sectors and stocks

BSE Bankex and BSE Information Technology were the leading sectoral losers and shed 0.5% each. 

Axis Bank was the top loser on Sensex and tanked over 6% after the private bank reported a whopping 73% decline in net profit at Rs 580 crore for the October-December quarter on account of rise in bad loans. 

Among gainers, BSE Telecom index added 1.3%, led by gaines in Bharti Airtel (up 3%), Idea Cellular (up 2.6%) and GTL Infra (up 1.5%).

Motherson Sumi surged over 3% to Rs 338 after the company agreed to buy Finnish truck wire maker PKC Group for 571 million euros ($609 million). 

China's Q4 GDP better-than-expected 

Boosted by higher government spending and record bank lending, China's economy grew by a faster-than-expected 6.8% in the fourth quarter, giving it a solid tailwind heading into what is expected to be a turbulent 2017.

ECB stands pat

The European Central Bank (ECB) announced it would maintain its negative interest rate policy and maintain a record pace of asset purchases to stimulate tepid growth amid sagging inflation.

ECB chief Mario Draghi described the current euro zone recovery as "dampened by the sluggish pace of structural reform" and said a "very substantial degree" of monetary policy stimulus was still needed.

Fed says unwise to allow US economy to run 'hot'

With monetary policy still modestly accommodative, the US central bank should continue to raise interest rates slowly or risk harm to the recovery the Fed has sought to nurture, Federal Reserve Chair Janet Yellen said on Thursday.

"I think that allowing the economy to run markedly and persistently “hot” would be risky and unwise," Yellen said at the Stanford Institute for Economic Policy Research. 

Global markets

Asian markers were trading mixed. MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.2%, and looked set to end the week 0.1% lower.

Japan's Nikkei reversed earlier gains to trade flat as the yen strengthened, and was on track for a 1.1% weekly loss.

Australian stocks retreated 0.6%, heading for a 1.1% decline for the week. South Korean shares slid 0.2%, poised to end the week 0.4% lower.

China's Shanghai Composite index bucked the trend to lose 0.5%. 

US stocks were restrained overnight, with the major indexes posting losses of as much as 0.4%, and the Dow Jones Industrial Average down for its fourth straight session.

(With inputs from Reuters)