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Markets rangebound; banking shares slump

Markets continued to trade weak in late morning trades amid profit taking in select rate sensitive and capital goods shares.

By 11:40AM, the Sensex was down 14 points at the 28,986 mark while the Nifty slipped 31 points to 8,750.

Annual growth in production of the eight key infrastructure industries declined to a three-month low of 2.4 per cent in December, compared with 6.7 per cent the previous month and four per cent in December 2013. This is likely to have a negative impact on the industrial growth numbers for the month, as these industries have a weight of 38 per cent on the Index of Industrial Production (IIP). 

Meanwhile, foreign institutional investors continue to remain net sellers to the tune of Rs 264 crore, as per provisional stock exchange data.

Asian share markets followed Wall Street higher on Wednesday as revived risk sentiment dented the US dollar and sovereign bonds, though it was far from clear how long the sudden mood swing would last. The Nikkei was up 1.8% while Shanghai Composite, Hang Seng and Straits Times were up 0.4-0.7% each.

Capital goods index was the top sectoral loser down 1% followed by Bankex, Auto and Power indices. Metal and Realty indices were among the top gainers up over 1.3% each.

Capital goods majors L&T and BHEL were down over 1% each amid sluggish core sector growth in December. 

Banking shares have extended losses for thwe second straight session on National Stock Exchange (NSE) after the Reserve Bank of India (RBI) Governor Raghuram Rajan decided to leave repo rate unchanged at its credit policy meet yesterday.

Axis Bank was the top Sensex loser down nearly 4% amid profit taking while ICICI Bank and SBI were down 0.5-1% each.

Shares of Hero Motocorp are trading lower by nearly 1.5% to Rs 2,775 on the BSE as the auto major posted lower than expected quarterly results. The earnings were lower owing to marketing expenses at home and overseas, and investments in capacity expansion.

Shares of NTPC turn ex-dividend today for an interim dividend of Rs 0.75 per share for the year ending 31 March 2015. The stock is down nearly 1%.

Other prominent losers are BHEL, Tata Motors, TCS, Maruti Suzuki, HUL and L&T.

On the gaining side, oil exploration major ONGC extended its yesterday’s rally of 2.6% on rising crude oil prices. Crude oil extended a rally that has pushed up prices 20% in the past four trading sessions following oil’s bottom to near six-year lows.

However, HDFC Bank was up 1% ahead of its plans raise Rs 10,000 crore from the overseas market this month.

Sesa Sterlite extended gains and was up 2.7% after global iron ore prices bounced back.

Among other shares, Force Motors were up 13% on media reports that Germany-based global auto major Bayerische Motoren Werke AG(BMW) will source auto components from the Pune-based company.

In the broader market, the BSE Mid-cap and Small-cap indices were trading mixed.

Market breadth was slightly positive with 1,226 gainers and 1,187 losers on the BSE.

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