Sensex snaps 4-day bull run, sheds 52 pts as banks weigh

Weak auto sales & depreciation in rupee dampen the market mood

Market benchmark Sensex logged its first drop in five sessions today as lenders retreated on caution ahead of the unveiling of a new methodology for calculating lending rates while trading sentiment also remained muted on worries over a US rate hike.

The gauge shed 51.56 points as weaker-than-expected auto monthly sales numbers and depreciation in the rupee, which ended 10 paise lower, also dampened the market mood.

Manufacturing PMI, which fell to a 25-month low of 50.3 in November also added to the negative bias.

"Mainly, under-performance from the banking and finance counters hurt the sentiment and that further worsened with decline in IT & capital goods," said Jayant Manglik President Retail Distribution of Religare Securities.

The index opened higher on sustained buying and advanced to the day's high of 26,256.42, however, profit-booking in the later half of the day dragged it into the negative zone to touch the day's low of 26,041.68.

It recovered part of the lost ground in the fag-end trading and settled the day 51.56 points or 0.20 per cent lower at 26,117.85. The index had risen by 393.66 points in the last four sessions.

The 50-share NSE Nifty ended 23.55 points or 0.30 per cent down at 7,931.35 after moving between 7,979.30 and 7,910.80.

Banking shares bore the brunt after Reserve Bank yesterday said it will shortly announce methodology for determining the base rate, taking into account the marginal cost of funds.

From this space, major losers were SBI, ICICI Bank, HDFC Bank and Axis Bank, falling by up to 1.83 per cent.

Steel stocks, however, gained on hopes China may announce further stimulus measures to prop up slowing economy.

Aided by persistent buying orders from retail investors, the broader markets outperformed the Sensex with the mid-cap and small-cap indexes rising 0.20 per cent and 0.01 per cent, respectively.

In other Asian markets, China ended 2.33 per cent higher as disappointing manufacturing data spurred hopes of stimulus for the world's second biggest economy.

Other indices like Hong Kong and Singapore ended higher between 0.44 per cent and 0.47 per cent, respectively, while Japan, South Korea and Taiwan declined 0.07-0.72 per cent.

European stocks were higher amid speculation that European Central Bank will announce a fresh round measures to boost the euro zone economy at its regular monetary policy review scheduled tomorrow. Key indices like France, Germany and the UK moved up by 0.01 per cent to 0.45 per cent.
In the domestic market, 14 stocks out of the 30-share

Sensex ended lower, while Vedanta ended flat.

Major losers were SBI (1.83 pc), Infosys (1.53 pc), BHEL (1.42 pc), ICICI Bank (1.21 pc), HDFC (1.15 pc), Tata Motors (1.13 pc), Coal India (0.98 pc) and HUL (0.88 pc).

However, Lupin rose by 3.24 per cent followed by Tata Steel 2.46 per cent, Bajaj Auto 1.55 per cent, Maruti 1.41 per cent, Cipla 1.35 per cent, Dr Reddy's 1.22 per cent, RIL 1.14 per cent, ITC 1.10 per cent and Hindalco 1.01 per cent.

Among the BSE sectoral and industrials, bankex fell by 1.03 per cent followed by IT 0.86 per cent, finance 0.85 per cent, capital goods 0.71 per cent and teck 0.64 per cent while healthcare rose by 0.87 per cent, FMCG 0.17 per cent, telecom 0.51 per cent and metal 0.40 per cent.

The market breadth remained positive as 1,486 stocks ended higher, 1,296 finished in red while 155 ruled steady. The total turnover rose further to Rs 3,030.55 crore from Rs 2,994.91 crore yesterday.