Discouraging IIP nos and rising inflation and RBI rate hike worries drag down the market for the forth day in a row

Sensex dropped by 210.03 points to close at 20715.58 and Nifty ended at 6168.4, losing 68.65 points. Nifty corrected nearly 254 points from it's all time high in just 5 sessions on higher inflation, poor IIP numbers and fear of rate hike by RBI Governor as mid-quarter review of monetary policy 2013-2014 is scheduled on 18th Dec.

Industrial production, represented by IIP, contracted more than forecast to negative 1.8% in October as against market expectation of negative 1.2%. In September, IIP grew at 2%. On the other hand, consumer price inflation rose further in November 2013 to 11.24% from revised 10.17% in October. At 11.24%, retail inflation was sharply higher than market expectations of 10%. CPI inflation for October has been revised upward from earlier estimate of 10.1%.

All the NCX sectoral indices closed into red and CNX PSU Bank index was the top loser by 2.49% followed by BankNifty(2.31%) and CNX Finance(2.22%)

In Nifty50 stocks, Tatamotor was the major gainer by 2.73% and closed at 370.3 whereas JPAssociat was the top loser by 5.26% and closed at 51.35.

JPAssociat was the turnover topper by the traded quantity and ICICIbank by the traded value on NSE.

Advance decline ratio was negative at 3.93 : 1 as 712 stocks declined and just 181 gained today on NSE.

   Mr.Rajan said economic growth was weak and inflation was high, which was a cause for concern. Both monetary and fiscal policies were essential to tackle inflationary pressures, he said. Regarding the fiscal policy, Rajan said the Finance Minister had laid down a road map that is expected to keep the fiscal situation under control. The government's fiscal deficit target is 4.8 per cent of GDP in this financial year. Aligning diesel prices with international rates would definitely control the fiscal deficit, the Governor said. "In the short term, hiking diesel prices will have an inflationary impact. But in the long run, this will lead to deficit reduction," he observed. 

Nifty Outlook :

Spot Nifty has given a negative closing on weekly basis even after making new high of 6415.25 on the 1st day of the week. Now Nifty should sustain above 6140 or give close above the level for the next week to continue this uptrend. Market will be volatile and the movement will be depend on RBI mid quarter policy outcome and Tapering in bond purchase in the U.S. and definitely this will direct the market in coming weeks.

Immediate Support : 6140

Immediate Resistance : 6190