Sensex slumps over 300 pts; rate sensitive shares weigh

BSE Bankex, Capital Goods, Realty, Metal and Auto indices have plummeted between 2-3%

Benchmark indices are reeling under selling pressure weighed down by rate sensitive sectors like banks, auto and capital goods on fears that interest rates would continue to remain high.

The Reserve Bank of India's Third Quarter Review of Monetary Policy for 2013-14 is scheduled tomorrow.

By 10:15, the Sensex was lower by 321 points at 20,812 mark and the Nifty declined by 96 points at 6,168 mark.

Adds Kunal Bothra, technical analyst, LKP Securities, “The key level for Nifty spot is 6140 on Nifty spot as a support. A close below this level could indicate a further selling pressure and unwinding of a lot of long positions.”

On the global front, Asian shares took a beating and the yen raced to a seven-week high against the dollar on Monday, as emerging markets remained under pressure with the US Federal Reserve poised to continue tapering its stimulus and tighter credit conditions in China raising fears of a slowdown.

MSCI's broadest index of Asia-Pacific shares outside Japan tumbled 1.6% to nearly a five-month low, on track for its worst one-day performance since August after losing more than 1.0% on Friday. Japan's Nikkei share average gave up the 15,000-level and dropped 2.7%.

The market sentiment was also hit by data showing that foreign funds were net sellers of Indian stocks on Friday, 24 January 2014.

Foreign institutional investors (FIIs) sold shares worth a net Rs 230.96 crore on Friday as per provisional data from the stock exchanges.

Back home, the rupee hit 62.90 in early trade, its lowest level since November 22, as Asian stocks were trading with heavy losses. The pair was last trading at 62.77/78 vs Friday's close of 62.66/67.

Hindustan Unilever, Adani Ports, Adani Power, Allahabad Bank, Idea Cellular, Just Dial and Shree Cement will unveil Q3 results today.

On the sectoral front, BSE Bankex, Capital Goods, Realty, Metal, Consumer Durables and Auto indices have plummeted between 2-3%. Infact, all the major BSE sectoral indices are trading in red zone.

Rate sensitive shares were among the top losers in early trades on Monday, amid weak global cues, on fears that interest rates would continue to remain high.

Last week, Reserve Bank of India Governor Raghuram Rajan commented that inflation is a destructive disease which is forcing the central bank to keep interest rates high.

Bank shares were among the top losers in early trades with ICICI Bank, HDFC Bank, SBI and Axis Bank down 2-3% each.

In the auto pack, Tata Motors, Mahindra & Mahindra, Maruti Suzuki, Bajaj Auto and Hero MotoCorp were down 1-3% each.

Engineering majors BHEL and Larsen & Toubro were both down 2% each.

Shares in Tata Motors fell 3% on Monday after the automaker's managing director, Karl Slym, died on Sunday when he fell from a high floor of a hotel in Bangkok.

TCS slipped marginally after turning ex-dividend today. FMCG major Hindustan Unilever has declined ahead of its Q3 results today.

Other notable losers are Sesa Sterlite, Hindalco, Tata Steel, Bharti Airtel and Tata Power.

Among other shares, SKS Microfinance, the only listed microfinance firm in India, gained in an otherwise weak market on sharp rise in profitability for the third quarter ended December 2013.

The broader markets are under performing the benchmark indices- BSE Midcap and Smallcap indices have fallen by nearly 2% each.

The market breadth in BSE remains dismal with 1,224 shares advancing and 323 shares declining.