Markets end tad lower, banks weigh

RIL, Coal India among draggers

Markets ended in the red on Thursday, snapping four days of gain, weighed down by profit taking in index heavyweight Reliance Industries and bank shares. The Sensex declined to a low of 17,157 and finally ended down 33 points at 17,224. Nifty slipped 13 points at 5,228.

Broader markets outperformed with the BSE mid and small-cap indices gaining 0.2 and 0.5% each.

The rupee fell to 55.775/78 versus its previous close of 55.47/48 as losses in domestic shares and the euro boost the greenback, but traders expect resistance at around current levels, preventing much sharper gains.

In Asia, markets declined as hopes of stimulus action by central banks faded ahead of a European Central Bank's meeting. The Monetary Policy Committee of Bank of England will hold a monthly policy meeting on interest rates in the United Kingdom today. Hang Seng declined  0.6% and Shangai COmposite dipped 0.5%. Nikkei was up marginally. Among other European bourses, CAC and FTSE advanced marginally.

BSE oil & gas index shed 1% at 8,051 on selling pressure in index heavyweight - Reliance. Bankex, metal and auto indices also dropped around half a per cent each.

Reliance was the biggest dragger among Sensex stocks and accounted for a 13 points loss on the Sensex. Tata Motors shed 1.8% to Rs 223, while Sterlite, Tata Steel were down 1% each.

Coal India slipped 0.7% at Rs 347. The Children's Investment Fund Management LLP, a shareholder in Coal India has reportedly filed a petition in an Indian court seeking an increase in coal prices by the state-run company. According to reports, the U.K.-based hedge fund said in its petition to the Delhi High Court that India's coal ministry had illegally interfered in the setting of coal prices.

State Bank of India (SBI), on Wednesday brought interest rate relief to its new home and automobile loan customers. The new rates, lower by 25-85 basis points (bps) for home loans and 50 bps for auto loans, will come into effect from August 7. The bank, however, is yet to decide on reducing the base rate — the benchmark rate to which all bank loans are linked. Shares of SBI dropped 1% at Rs 2,015.

DLF was flat at Rs 208 on reports that the company is planning to raise around Rs 3,000 crore from sale of its 17.5 acre prime land in Mumbai and the deal is expected to close this quarter.

Aviation and OMCs reacted to the 4.5 per cent hike in jet fuel prices, the second increase in a month. Spice Jet was down 3% while Jet Airways gained 1.5%. HPCL and BPCL were down 1-2% each.

"BPCL has corrected sharply from 395 to 350 levels in few sessions. Stock can move further down till 330 levels then only bounce back can be expected. HINDPETRO is consolidating in range of 330-360 levels. Any breakout will be the decisive move for the stock. IOC a bounce can be expect at current levels till 275-280 levels," said Mudit Goyal, technical analyst, SMC Global.

Cummins India soared 8% after reporting a better-than-expected net profit at Rs 181 crore for the quarter ended June 2012, on back of higher sales and other income. Analysts, on an average expected net profit of Rs 150 crore for the quarter. The company had a net profit of Rs 177 crore in year ago quarter.

The country's second largest two-wheeler maker Bajaj Auto today reported 2.9% fall in motorcycle sales at 3,08,858 units in July. Stocks ended up 0.6% at Rs 1625.

BSE market breadth was marginally positive. Out of 2,817 stocks traded, 1,507 shares advanced while 1,180 shares declined.