Live:Sensex slips into red, banks weak on inflation woes

11:48 am Erasing early morning trade gains, Indian markets lost steam in mid-morning trade with the Sensex slipping almost 300 points from the day’s high and the Nifty losing about 100 points from the day’s high. However at 12 pm, the indices recovered slightly but were still trading in the red.

While the BSE Sensex was down70 points at 20538, the Nifty was down 28 points at 6084.

Banks, capital goods and realty stocks were under selling pressure.

Banking shares were under pressure falling by up to 4% on the National Stock Exchagne (NSE) after higher-than-expected inflation data dented hopes for a rate cut in the upcoming RBI’s monetary policy review on 29 October.

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HDFC Bank, Bank of India, YES Bank, IndusInd Bank, Union Bank of India, Canara Bank and Kotak Mahindra Bank were down between 2-4%.

However, technology stocks gained with Wipro and TCS gaining 1-2 percent each. TCS will declare its July-September quarter results in the evening. A CNBC-TV18 poll shows analysts on an average expect its profit after tax to rise 19.25 percent sequentially to Rs 4,527 crore in second quarter.

John Woods of Citi Investment feels that the market is still looking for important structural reforms.

“We have started to see flows returning back to EM in general and India in particular but a number of bodies are cautioning that unless India follows through some fairly substantive and meaningful structural reforms, it will not be able to depend on foreign direct investment (FDI) to fund its external deficit,” woods said in an interview with C_NBC-TV18._

Meanwhile Morgan Stanley has said that investors have turned equal weight on Indian stocks as only 21 percent of the 95 institutional investors it surveyed are overweight on India against 39 percent in February. On average, investors expect the Sensex to be at 20,949 in the next 12 months, almost flat versus current levels.

Morgan Stanley survey shows a very split view on financial shares, which is selected as both the likely best performing sector and the worst. The investment bank is “underweight” on banks in its model portfolio.

Sensex up, Hindalco and Nalco plunge after CBI files FIR in coalgate scam

Indian markets opened in the green with theSensex up 130.56 points at 20738.10, and the Nifty up 34.85 points at 6147.55. However, shares of KM Birla led companies were in the red as theCentral Bureau of Investigation has named Aditya Birla Group Chairman Kumar Mangalam Birla in its 14th FIR in the case.

While Hindalco was down 5 percent in opening trade, Nalco as down 2 percent.

FIRs have been filed against Kumar Manglam Birla, Nalco, Hindalco and former secretary coal PC Parakh. Cases of cheating, forgery and financial misrepresentation have been filed.

CBI searches are also on in Delhi, Kolkata, Bhubaneswar and Mumbai in connection with the coal scam. Hindalco is down 2 percent while Nalco is under a bit of selling pressure.

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Birla is the promoter of companies such as aluminium maker Hindalco, mobile carrier Idea Cellular and financial services group AB Nuvo.

According to reports, CBI has alleged that Birla was given undue favours when a coal block was allocated to him in 2005 at the time PC Parekh was the Coal Secretary.

RIL gained 3 percent after its net profit stood at R 5490 crore for the quarter ended September 30, 2013 as compared to Rs 5409 crore for the quarter ended September 30, 2012.

JP Morgan has upgraded Reliance Industries to “overweight” from “neutral” and raised its target price to Rs 1,000 from 800, citing attractive long-term valuations.

“We remain positive on RIL’s core business expansion strategy, and we expect resultant organic earnings growth to drive stock performance,” says JP Morgan in a report on Tuesday.

Fortis Healthcare surged 6.28% on BSE. The company said that Fortis Healthcare International Pte Ltd which is one of the step down subsidiaries of Fortis Healthcare based out of Singapore, has decided to divest its 100% shareholding in Altai Investments, the holding Company for Quality Healthcare, Hong Kong, to Bupa, for $355 million. The deal is expected to be completed in October 2013.

Results today: TCS, Bajaj Auto, Bajaj Holdings, HDFC Bank, NIIT Tech, Advanta, Bajaj Finserv, Blue Dart, Continental Contr, Dev Credit Bank, Geojit Bnp and Jay Bharat Maruti.

The Indian rupee too edged higher by 30 paise at 61.25 per dollar in early trade as against previous day’s closing of 61.55 per dollar. The dollar slipped and the yen gained on safe-haven demand as concerns rise in some quarters that the US may actually default on its debt obligations.

Meanwhile, India’s September CPI Combined inflation rate stood at 9.84% vs 9.52% August while India’s September WPI inflation rate was at 6.46% vs 6.10% August.