10:30AM The Sensex declines on RBI move to tighten monetary policy.
The Sensex on BSE lost 400.06 points, or 2.9%, to end at 13,399.43. The market-breadth was rather weak. As 1,974 shares declined, 589 advanced and 43 shares were unchanged. From the Sensex stocks, 25 stocks declined, the rest advanced. The turnover on BSE was Rs 4,830 crore, much higher than Rs 4,148 crore on Friday. On NSE, the turnover today was Rs 9,344.45 crore, higher than Rs 7,556.04 crore on Friday.

Economic news

On Friday, the RBI had rasied the rates in cash reserve ratio, which is the amount of assets that all banks must deposit with the central bank, by 50 basis points to absorb Rs 13,500 crore from the system.

Finance Minister P Chidambaram expressed his confidence that bank stocks will adjust to new RBI guidelines and today’s market drop is not a long term concern.

Most-active stocks

Reliance Communications was the most-active stock with a turnover of Rs 409 crore followed by Indiabulls, Reliance Industries, Tata Steel and SBI.

Decliners

That banks will raise lending and deposit rates in he wake of RBI move weighed down bank stocks. SBI plummeted 9% to Rs 1,230, ICICI Bank dipped 7% to Rs 814, and HDFC Bank was off 5.3% to Rs 1,027. Reliance Industries shed 3.2% to Rs 1,227.

Cellular service providers fell under selling pressure. Bharti Airtel was down 4.9% to Rs 602 and Reliance Communications lost 4.6% to Rs 426.70.

Tata Steel declined 6.7% to Rs 460. In response to the CSN bid Tata Steel announced Monday, it was reconsidering its position on Corus. CSN today proposed a bid for Corus that outbid Tata’s. Cement large-cap ACC took a dip, sinking 6.8% to Rs 1,029.50, and NTPC lost 6.5% to Rs 141.65.

Infosys was 0.6% lower to Rs 2,182 in volatile trade. The company is renewing a few of its contracts at a premium. The stock has been included in the Nasdaq 100 index.

Zee Telefilms declined 8.7% to Rs 316.45, after ESPN-Star, a joint venture of Walt Disney Co and News Corp, got the broadcast rights for International Cricket Council matches.

L&T shed 1.3% to Rs 1,431.50. L&T has secured a Rs 5,400 crore contract from GMR Infrastructure, to design and construct the terminal and airport runway at New Delhi airport. Oil explorer ONGC was down 0.4% to Rs 837.

Advancers

Budget airline SpiceJet surged 8.7% to Rs 58.10, after Tata group on Monday announced it had bought less than 10% stake in the company as a purely financial investment.

Satyam gained 0.78% to Rs 460.25, Cipla moved 0.61% higher to Rs 248, TCS added 0.37% to Rs 1,180.55 and ONGC advanced 0.23% to 842.45.

IVRCL Infrastructures gained 0.3% to Rs 404, following the company’s statement that Cushman & Wakefield India had valued land reserves of its subsidiary, IVR Prime Urban Developers, at Rs 3,887.90 crore - Rs 4,297.10 crore.


9:45AM Stocks opened little changed amid cautiousness ahead of Fed’s meeting.
U.S. stock markets opened little changed Monday, with investors cautious ahead of Tuesday’s Fed Reserve’s decision on interest rates. Market also digested a number of merger deals in the metals sector which provided a boost in pre-open. Metals stocks gained after hedge fund SAC Capital Advisors made a bid for miner Phelps Dodge (PD: chart), ready to oppose the company''s planned takeover by Freeport-McMoRan Copper & Gold Inc. However, weakness among energy stocks like Exxon Mobil Corp. (XOM: chart) offset optimism over the corporate deal activity. Some biotechnology and semiconductor stocks have also came under pressure. Oil-sensitive airline sector posted some strength, generated by weakness in the price of oil, as crude for January delivery traded at $61.48 a barrel.

In corporate news, chemicals giant DuPont (DD: chart) said on Monday that it plans to eliminate about 1,500 jobs and reduce operating costs by roughly $100 million per year. Company’s shares added 1.26%. In the first hour of trading, the Dow Jones industrial average rose 15.94, or 0.13%, to 12,323.43. The S&P 500 index rose 0.60, or 0.04%, to 1,410.44, and the Nasdaq composite index fell 1.50, or 0.06%, to 2,435.86. Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.51% from 4.55% late Friday.