Trades End 0.4% Down, IT Stocks Tumble On Growth Concerns

The Indian equity markets remained largely choppy ahead of the RBI's monetary policy review due tomorrow. The BSE Sensex as well as Nifty closed down about 0.4%.

The keenly awaited mid-quarterly review of the RBI's monetary policy is being tracked by all the market participants. With inflation coming down, some believe that the apex bank may cut the CRR, while there are others who believe that the rates may not be cut as the IIP growth for Nov 2012 has come in above expectations. Industrialists have been asking the RBI to cut the interest rates, ans hence, there will huge speculation in the markets tomorrow.

Meanwhile, the government today lowered the growth projection for the current financial year to 5.7%-5.9%, down from 7.6% as estimated earlier.  For the second half of the current fiscal, the government now expects to see a growth rate of 6%.

The Asian markets remained directionless today, with the Japanese Nikkei and Chinese Shanghai showing gains, while Hang Seng was down by 0.4% by closing. The Japanese index gained on reports that the political party which backs the economic stimulus has returned to power. The Japanese currency also hit a 1.5 year low, which is a boon for exporters. Investors in the country are now expecting an easing by the central bank. Chinese stocks gained on the news that the government will implement a a mix of fiscal and monetary policy to boost economic growth.

European stocks on the other hand, are trading lower. The FTSE and CAC have taken a fall over 0.6% so far, and DAX is showing a loss of 0.35%.

Sterlite Industries has gained 4% and emerged as the highest gainer. Among the Metals stocks, Hindalco and Jindal Steel were up 2% each. Maruti Suzuki ended the day 1.7% higher. Tata Motors also gained on the Nov 2012 sales of JLR.

In individual stocks, Adani Ports gained 5% and was the top gainer among the 'A' group counters. Jain Irrigation was also up by 5%. Voltas and Adani Enterprises gained 4% each by closing. Most power stocks also gained today as we saw NHPC gaining 3.6%. Adani Power was higher by 3.18%, while Neyveli Lignite and PFC gained 2% each.

IRB Infrastructure dropped as much as 7% as its promoters pledged over 4.3 million shares. Divi's Labs also saw some profit booking, and the stock lost 3.3% in the day.

Kingfisher Airlines tumbled about 5% on news that its board has capped the FII limit in the company to just 3% of the paid up capital. Jet Airways, however, gained over 2% on speculations over the Etihad deal.

The advance-decline ratio on the BSE remained positive, as the total advances outnumbered the declines.

The RBI will announce the mid-quarterly review of its monetary policy tomorrow. The markets are keenly tracking its moves, and therefore, we advise investors to be cautious before taking their positions.