Sensex ends below 27,400; ITC, metals drag

Benchmark share indices ended marginally lower, amid a volatile trading session, dragged by ITC while metal shares witnessed a sell off tracking weak commodity prices on rising concerns over global growth.

The 30-share Sensex lost 79 points to close at 27,347 and the 50-share Nifty shed 22 points to close at 8,278.

Meanwhile, foreign institutional investors were net buyers in Indian equities worth Rs 235 crore on Tuesday, as per provisional stock exchange data.

Key Events:

The wholesale price index-based inflation inched up to 0.11% in December, snapping a six-month easing trend as food costs jumped up year-on-year.

Inflation in manufactured products, which has the highest weight of almost 65% in WPI, declined over this period due to low demand and global prices, while fuel prices declined as international crude rates softened, official data released on Wednesday showed.

The price of oil dipped below $45 a barrel following the latest sign from OPEC that the group doesn't plan to cut production.

The World Bank cut its forecast for global growth, warning that the world economy remained overly reliant on the “single engine” of the US recovery.

Rupee:

The rupee is trading at 62.10 against the dollar on Wednesday at the Interbank Foreign Exchange market, extending its upward march for the sixth day on sustained selling of the American currency by exporters amid fresh overseas capital inflows.

Key Stocks:

On the sectoral front, BSE Metal index was the top loser down 3.5% followed by FMCG, Oil & Gas and Healthcare indices trading lower between 0.6-1%.

However, BSE IT index emerged as the top gainer up 1% followed by Power, Auto and Teck indices up between 0.3-0.6%.

The metal pack ended lower with Hindalco and Sesa Sterlite leading the decline down 6% and 7% each after copper futures dived 6.2 percent to $5,499 a tonne when major chart support cracked and triggered a host of stop-loss sales.

World Bank cut its 2015 growth forecasts blaming sluggishness in the euro zone, Japan and some major emerging economies. Tata Steel ended down 3.8%.

ITC lost more than 3% on talk that the government plans to ban sale of loose cigarettes. Among other cigarette stocks, VST Industries was down 1.4% while Godfrey Phillips lost 3%.

Oil shares reeled trading under pressure on the back of a further slide in the crude prices. RIL and GAIL were down between 0.5-1%.

Financials ended lower in today’s trade with ICICI Bank, Axis Bank and SBI down between 0.2-1% while HDFC Bank ended the session with marginal losses.

Shares of fast moving consumer goods (FMCG) companies were on a roll with most of the frontline companies such as Hindustan Unilever and Marico ending the session on a robust note. HUL gained over 4%.

In the IT pack, Infosys continued to witness buying interest post its third quarter earnings and was up 2%. TCS was up 0.8% ahead of its third quarter earnings on Thursday.

Capital goods shares firmed up on the back of encouraging November industrial growth. BHEL gained 4%.

Among other shares, private sector lender YES Bank reported a 30% rise in net profit to Rs 540.3 crore for the quarter ended 31 December, 2014, aided by growth in net interest income (NII) and net interest margin.

The stock gained nearly 1%.

Tata Teleservices (Maharashtra) was locked in 20% upper circuit at Rs 10 after the Reserve Bank of India (RBI) approved the offer for buyback of DoCoMo's stake in the company.

Bajaj Finance soared 8% on the BSE after reporting a strong 33% year-on-year (yoy) jump in net profit at Rs 258 crore in October-December 2014 quarter (Q3), on back of strong operational income. The company had profit of Rs 194 crore in the same quarter last fiscal.

In the broader market, the BSE Mid-cap and Small-cap indices ended in line with the large counterparts and lost 0.2% and 0.4% each.

Market breadth was weak with 1,260 advances and 1,597 losers on the BSE.

Global Markets:

Financial and commodities markets slumped on Wednesday after the World Bank cut its growth forecasts for 2015 and 2016, fuelling fears that the benefits of cheaper oil may be offset by anaemic economies and the threat of deflation.

Share prices, commodities and lower-rated bonds fell as investors sought safety in core government bonds and currencies like the Japanese yen. The dollar dropped 1% against the yen.

Japan's Nikkei share average fell 1.7% on Wednesday as investors held back due to concerns over plunging oil prices while Hong Kong shares fell on Wednesday, in line with most regional markets hurt by declining commodity prices and after the city's chief executive said the government will suspend an immigrant investor programme.

Also, China stocks closed down on Wednesday, reversing earlier gains as investors sold off shares in manufacturing, in light trading volumes, as a long stock market rally shows signs of losing steam.