Liquidity worries haunt stocks, Sensex, Nifty stay soft

Barring short spells of positivity, the market today traded with distinct weakness for the third day, ending with marginal loss, after the US Fed said it will wind down the stimulus signalling a rate hike this year.
The mood at the outset was one of bullishness, given a gap-up opening, but bears took charge during the last half an hour of trade.
The rupee, which sank to over a two-month low during the day, reflected the stock market dithering. This followed a surging dollar after the Federal Reserve, at the end of its two-day monetary policy meet, kept the benchmark rate unchanged and announced a gradual end to the crisis-era stimulus programme.

Amid continuous foreign capital outflows, the 30-share barometer sank, but made a sharp recovery only to close at 32,370.04, a loss of 30.47 points, or 0.09 per cent. The gauge swung almost 300 points intra-day.
It had declined 23.25 points in the previous two days.
The 50-share NSE Nifty, after moving between 10,158.90 and 10,058.60, finished lower by 19.25 points -- or 0.19 per cent -- at 10,121.90.

Asian markets turned off-colour after the US Fed move, giving investors the blues.
"Weakness in the rupee reflected markets' reaction to Fed outcome and potential rate hike in December. However, a sharp recovery was seen... FM's rhetoric on measures to review GDP has also served to arrest declines. Current developments to bring petroleum products under GST might enthuse investors," said Anand James, Chief Market Strategist, Geojit Financial Services Ltd.

Of the Sensex constituents, ICICI Bank recorded a big fall of 1.99 per cent to Rs 285, followed by Axis Bank. Losses also came in from Coal India, ONGC, SBI, PowerGrid, Asian Paints, which fell by up to 1.09 per cent.
The pharma counter attracted buying interest as the rupee weakened against the dollar, with most of the earnings denominated in the US currency. Cipla, Lupin and Sun Pharma logged gains by up to 4.04 per cent.
Dr Reddy's hit pay dirt, surging the most by 7.47 per cent to Rs 2,486.45 after the company said it has received Establishment Inspection Report (EIR) from the US health regulator USFDA for its formulations manufacturing facility in Andhra Pradesh.

Gains in TCS, HDFC Ltd, Bharti Airtel and Hero MotoCorp cushioned the overall fall to an extent.
Small-cap and mid-cap stocks moved in tandem with the benchmark indices, weakening by up to 0.51 per cent.
The BSE realty index was the biggest drag, down 2.28 per cent. Consumer durables, PSU and banking indices too weighed while healthcare and IT indices ended higher.
Foreign portfolio investors (FPIs) remained net sellers in the past several sessions, offloading equities worth Rs 1,185.40 crore. Domestic institutional investors (DIIs) bought shares to the tune of Rs 946.23 crore yesterday, according to provisional data.