Domestic GDP numbers failed to lift market sentiments on Tuesday as

investors turned cautious as

RELATED ARTICLES Sensex snaps two-day rally, down 82 pts on poor IIP nos Sensex snaps two-day rally, down 82 pts on poor IIP nos Sensex snaps two-day rally, down 82 pts on poor IIP nos Sensex up 123 pts in late buying amid firm European mkts Sensex up 123 pts in late buying amid firm European mkts

weak personal income data from the US overnight weighed heavy on global markets.

Concerns over rising pressure on the Reserve Bank of India to raise key policy rates also influenced sentiments.

The BSE Sensex fell 60.99 points, or 0.34 points, to close at 17,971.12. The Nifty index slipped 13.05 points, or 0.24 per cent, but barely managed to close above 5,400 level at 5,402.40.

“The gap between potential GDP growth and actual GDP growth, which is

estimated to be more than 1.5 per cent during the first quarter, will lead

to inflationary pressures. Hence, the RBI is expected to continue with its

tight money policy and likely to hike repo and reverse repo rates by 25

basis points each and CRR by 50 basis points during the financial year,”

said Arun Singh, senior economist at Dun & Bradstreet India.

Banking stocks, such as IndusInd Bank, Union Bank and Kotak Mahindra Bank, dropped 3.93 per cent, 3.49 per cent and 2.62 per cent, respectively.

“Data from the expenditure side continued to remain suspect,” Deutsche Bank (Fixed Income Research for Asia) said in a note.

Yes Bank, SBI and PNB slid 1.92 per cent, 1.30 per cent and 0.66 per cent, respectively.

Heavyweight Reliance Industries fell 3.05 per cent, after it said after

Monday’s trading hours that it bought 14 per cent stake in EIH Hotels. EIH plunged 7.13 per cent. The stock was up 11.63 per cent on Monday on stake sale talk. ITC, another stakeholder in EIH, added 2.10 per cent to close at Rs 162.65.

“Reliance has slipped in the past several sessions on fundamental grounds.

We think the trigger is over. EIH may not see any upward move on the stake sale. However, the scrip looks good on a likely rise in occupancy rates in the season ahead,” said DD Sharma, senior vice-president of research at Anand Rathi Financial Services.

Auto stocks rose ahead of August sales numbers. M&M, Ashok Leyland, Maruti

Suzuki and Tata Motors gained 2.85 per cent, 2.15 per cent, 1.68 per cent and 1.61 per cent, respectively.

FMCG stocks jumped on defensive buying. Colgate Palmolive, United Spirits, Tata Global Beverages and ITC advanced 3.46 per cent, 2.70 per cent, 2.38 per cent and 2.20 per cent, respectively.

Dabur rose by Rs 4.50 to Rs 209.40 after the company fixed September 10 as the record date for issuing bonus in the ratio of 1:1. Kingfisher pared early gains ahead of its meeting on a fund-raising plan. The scrip closed at Rs 59.35, down 0.84 per cent from its previous close.

Kalindi Rail added 1.56 per cent to Rs 159.25 after the company received a contract worth Rs 180 crore from a Vedanta group firm for a railway siding and linkage project.

Meanwhile, Asian markets lost up to 3.5 per cent on Tuesday. European

markets opened in the red.

According to market regulator Sebi, FIIs bought Rs 272.70 crore worth of equities on Tuesday.