Rate-hike concerns keep markets down

Mumbai, May 18: Notwithstanding the disclosure of positive inflation figures today, the benchmark Sensex managed to register only a marginal gain of 3.70 points on the Bombay Stock Exchange to settle at 14,303.41, weighed down by concerns of another cash reserve ratio (CRR) hike.

''The market was hoping that if inflation stayed on at the 5 per cent mark, a rate hike in July itself was unlikely. But now that confidence is vanishing. Another couple of weeks of this 5 or a 4-point jump in inflation and RBI will definitely hike rates,'' market analysts explained.

Inflation for the week ended May 5 stood at 5.44 per cent as against 5.66 per cent during the previous week. The market had estimated it at 5.24 per cent.

The barometer Sensex opened in the red at 14,261.47, and touched a high of 14,337.06 and a low of 14,201.01 during intra-day trade.

Among the broader markets, the Nifty Index closed in negative terrain tanking 5.05 points on the National Stock Exchange (NSE) at 4,214.50 from its previous close of 4,219.55.

After opening lower at 4,216.50, it touched a high of 4,228.45 and a low of 4,177.00 during intra-day trade.

At the premier BSE, the market breadth was weak, as 1,488 shares declined as compared to 1,112 shares that rose, while 88 shares were unchanged. Hence losers outpaced gainers by a ratio of 1.3:1. The breadth turned negative from positive in early afternoon trade, analysts explained.

HDFC Bank has gained as much as 5.2 per cent over its previous closing price now. ICICI Bank is also up by 1.55 per cent. ITC, Hero Honda, Satyam Computers, Maruti Udyog, Larsen&Toubro, Ranbaxy Laboratories, Bharti Airtel and Tata Consultancy Services are up with notable gains.

Cipla, Infosys Technologies, Reliance Industries and Ranbaxy Laboratories have posted modest gains, while Reliance Energy is up marginally over its previous closing level. Bajaj Auto is down 7.55 per cent at Rs 2311.20. Gujarat Ambuja Cements, Dr Reddy's Laboratories, NTPC, ACC, Hindalco, Tata Motors, Tata Steel, Hindustan Lever, State Bank of India, Grasim Industries and Reliance Communications have no great takers as well. BHEL, Wipro and HDFC are down with small losses.

Besides large caps, a number of medium and small cap stocks too were struggling for support today as participants remain in profit taking mode. Reflecting this, the market breadth remains weak with declines far outnumbering advances.

UNI