Nifty slips below 5900 despite higher factory output

The BSE Sensex turned lower in the afternoon session on Tuesday as traders booked profit after sharp gains last week. Asian stocks also slipped weighing on sentiments.

 

The BSE Sensex was down 123 points or 0.62 per cent to 19,524, while the broader Nifty traded 43 points lower at 5,899 as of 12.30 p.m. The rupee, however, traded higher at 54.36 to the dollar.

 

Some analysts said a higher than estimated industrial output in January may dim the chances of a rate cut next week. Factory output grew 2.4 per cent in January from a year earlier, nearly double the 1.2 per cent forecast by analysts. The IIP expanded for the first time in three months in January.

 

Accelerating consumer inflation pared some of the rate cut hopes for the RBI's policy review on March 19. The Consumer Price Inflation rose to 10.91 per cent from 10.79 per cent in January.

 

FMCG stocks saw some buying interest, but most other groups of stocks traded lower. Banking stocks were down 1.3 per cent while consumer durables slumped 2 per cent. IT stocks continued to see profit taking.

 

On the Nifty, 38 of the 50 stocks traded lower, led by Tata Power. The stock fell over 3 per cent after a downgrade by global investment bank Credit Suisse.

 

Shares in energy major Cairn India, iron ore miner Sesa Goa, two-wheeler manufacturer Bajaj Auto, private lender HDFC Bank and mobile carrier Bharti Airtel slipped 2-3 per cent.

 

Drug maker Ranbaxy and cement maker ACC were among the top Nifty gainers, rising over 2 per cent. HUL, India's biggest FMCG firm and utility vehicles major M&M also saw buying interest.