Nifty finding strong support at 6,000; SBI down 2%

Markets continued to remain range bound in late noon trades on Friday as gains in IT majors helped offset most of the losses in rate sensitive shares.

At 2:30PM, the 30-share Sensex was up 83 points at 20,277 and the 50-share Nifty was up 21 points at 6,022.

"As derivative data suggest that 6000 put is being accumulated. There is open interest of more than 90 lakh put at 6000 level which is higher than 6 months average," says Nitin Murarka, Head-Derivatives, SMC Global.

The wholesale price inflation, decelerated faster than expected, to ease to an eight-month low of 5.05% in January. The Wholesale Price Index (WPI) - based inflation softened from 6.16% in December, owing to ease in the food prices, official data released today showed. This is the lowest since May when the inflation rate stood at 4.58%.

Asian markets were trading firm and the US dollar weakened against the euro after sluggish economic data. Shares in Japan ended over 1% lower amid an appreciating yen while investors booked partial profits as US markets would remain close on Monday. The benchmark Nikkei ended down 1.5%. The Shanghai Composite was up 0.8% on the back of encouraging January trade data while Hang Seng gained 0.6%. However, Straits Times was trading marginally lower with a negative bias.

The Indian rupee was trading at 62.25 to the US dollar versus previous close of 62.42. Weak US retail sales data has raised some investors' expectations for a slower reduction in the US Federal Reserve's monetary policy stimulus programme. The decline in January WPI also helped improve sentiment.

Rate sensitive shares were among the top losers. The BSE Metal index was the top loser among the sectoral indices down 1.3% followed by Bankex, Capital GOods, Realty, Auto, FMCG and Healthcare among others.

SBI was down 2.5% after reporting 34% year-on-year (yoy) fall in net profit at Rs 2,234 crore for the third quarter ended December 31, 2013 (Q3), due to higher provisioning for bad loans. The country’s largest state-owned lender had profit of Rs 3,396 crore in the same quarter last fiscal. Among others HDFC, Axis Bank and ICICI Bank were down 0.8-1.3% each.

Auto shares also witnessed profit taking with Hero MotoCorp, Bajaj Auto, M&M and Maruti Suzuki down 1-4% each.

Pharma shares which had gained in the previous sessions also witnessed profit taking with Sun Pharma and Cipla down 1-3% each.

However, IT shares bucked the weak trend with Infosys and TCS up over 1% each.

Telecom shares were trading firm with Bharti Airtel, Idea Cellular and Reliance Comm after the spectrum auction ended yesterday. The companies are required to pay 33% of 1800MHz spectrum and 25% of 900MHz spectrum price upfront and rest can be paid in ten installments along with an interest component after two years moratorium period.

Other gainers include index heavyweight Reliance Ind and Tata Motors.

In the broader markets, the BSE Mid-cap and Small-cap indices were down 0.5% each.

Market breadth was weak with 1,390 losers and 1,044 gainers on the BSE.