Mumbai: Markets extended losses to 1% on Tuesday afternoon, as sentiment remained shaky amid fears of a likely interest rate hike.
At 2:56pm, the 30-share BSE index was down 1.13% at 19,007.196 points, with 21 components negative. The 50-share NSE index was down nearly 1 percent at 5,707 points.
Markets trading up 1% in the afternoon led by metal makers on the back of firm world prices, but investor sentiment remained fragile on fears borrowing costs could rise sharply.
Trading was choppy with the main index turning negative at one stage, extending losses to more than 6% since the start of the new year and the near-term outlook was far from clear.
Analysts said factory output data on Wednesday and inflation data on Friday would provide clues to how much the central bank would raise key interest rates when it reviews monetary policy on 25 January.
Industrial output growth probably slowed to 6.6% in November from a year earlier, a median forecast in a Reuters poll showed, as inflation began to bite in Asia’s third-largest economy, which is growing at almost 9%.
Leading aluminium producer Hindalco climbed 2.4% and Tata Steel, the world’s seventh-largest steelmaker, gained 0.5% on firm world base metal prices and long-term bullish views, dealers said.
Non-ferrous metals producer Sterlite Industries rose 0.9%.
By 10:25 am, the 30-share BSE index was trading up 1.01% at 19,418.29 with 27 of its components gaining. It fell 0.1% at one point of time, after rising as much as 1.1% early.
“It is a pretty volatile session, which is not unusual after the fall we have seen recently,” Vaibhav Sanghavi, director of Ambit Capital.
“However, we are optimistic over a three-month horizon. Earnings are going to be good. There are no doubts about that.”
Brokerage KR Choksey said quarterly revenue growth for companies excluding banks were expected at 18.3% on year, while profits were seen up 20.5%.
Export-focused Infosys Technologies, which kicks off the earnings parade on Thursday, fell 0.7% to Rs 3,372.05.
The banking sector index, which had slipped 7.5% over five sessions on worries of about rate rises, was trading up 0.9% but there was little conviction.
While leader State Bank of India climbed 1.2%, rivals ICICI Bank and HDFC Bank were down 1.2% and 0.5% respectively. Mortgage lender Housing Development Finance Corp rose 1%.
In the broader market, gainers led losers in a ratio of 1.1:1 on volume of 68 million shares.
The 50-share NSE index was up 1% at 5,820.95 points.
Software services firm Patni Computer Systems was down 2.9% at Rs 450.50 even after US-listed software firm iGate, which has bought a majority stake, made an open offer for another 20.6% at Rs 503.50 each.
HCL Technologies was up 4.9% at Rs 487.15 after Credit Suisse upgraded the software services firm to outperform from neutral and raised the target price to 600 rupees from Rs 400.
APW President Systems rose by its daily upper limit of 5% to Rs 173.60, after the company said Schneider Electric had made an open offer for 20% stake at Rs 195 per share that would increase Schneider’s holding to 75%.