Bearish sentiments prevailed in the capital market after the United States Federal Reserve on Wednesday decided to unwind economic stimulus. Though Sensex opened on the higher side at 20,958 against the previous close of 20,859, it slipped into the red during the closing session.

The benchmark index made a high of 21,017 and low of 20,646 before closing at 20,709. It was down by 151 points. The turnover on BSE was up 24 per cent at Rs 3,073 crore against Rs 2,486 crore recorded on Wednesday.

On NSE, Nifty dipped 50 points to 6,167.

Milan Bavishi, Head Research, Inventure Growth & Securities, said the decision of the US central bank to cut its monthly bond purchases to $75 billion from $85 billion triggered fears of slowdown in inflow from foreign institutional investors into India.

“The focus would now shift to the Indian forex market to gauge the impact of this development on rupee,” he added.

The monetary policy announced by Reserve Bank of India on Wednesday has become a non-event after it left the key bank rates unchanged.

The US Fed tapering talk has led to expectation of rupee weakening against dollar and this could boost export oriented businesses such as pharma and information technology. However, IT stocks such as HCL Tech and Infosys are trading near overbought zone and are prone to profit booking.

Bank stocks fell in a volatile trade and BSE Bankex was down 315 points at 12,661. ICICI Bank was down three per cent at Rs 1,064. HDFC Bank shed two per cent to Rs 653. The bank on Wednesday said that it has filed an application with the Foreign Investment Promotion Board (FIPB) seeking approval for increasing foreign shareholding limit as the total foreign shareholding in the bank has crossed 49 per cent.

The Reserve Bank of India recently said the foreign shareholding in the bank has crossed the overall limit of 49 per cent of its paid-up capital and that no further purchases of shares would be allowed through stock exchanges.

Major gainers for the day include Wockhardt (10%), Adani Ports (6%), Bharat Forge (4%), Tech Mahindra (4%), Suzlon Energy (4%), HCL Tech (3%), Maruti Suzuki (3%), Marico (3%), and Nestle India (3%).

Losers were Strides Arco (-58%), Reliance Cap (-4%), IRB Infra (-4%), Oriental Bank (-4%), Dish TV India (-4%), Kotak Mah Bank (-4%), Financial Tech (-3%), and HDIL (-3%).

(This article was published on December 19, 2013)
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