Markets down on food inflation worries; Sensex loses 33 points

Falling for the second day in a row, the BSE benchmark Sensex today closed 33 points down in sluggish trade mainly due to worries over food inflation rising to double digits again.

After failing to hold on to the modest gains posted in early trade, the Bombay Stock Exchange benchmark index Sensex settled at 19,982.88, down by 32.92 points. In limited trade, the key index hovered in a range of 136 points.

Brokers said foreign investors were reluctant to make large scale transactions due to macro economic worries caused by a rise in global crude oil which touched USD 90 a barrel.

They attributed the sluggishness to rising food inflation which was at a six-week high of 12.13$ for the week ending December 11. They said markets are on holiday mood, too.

The National Stock Exchange's Nifty settled with a marginal dip of 0.07% or 4.40 points at 5,980.

"Hot money is not coming in the market, lack of investors confidence and rising food inflation on the back of sky-high onion prices are the main culprit for today's sluggishness," Religare Securities Executive VP Rajesh Jain said.

Global cues were mixed with indices in the US rising to two-year highs yesterday after a government report showed America's economy grew of 2.6% between July and September.

Most Asian stocks markets declined, while European bourses showed a narrowly mixed trend with CAC being down by 0.26% while DAX and FTSE were up by 0.06 per cent and 0.10% respectively.

On home front, a meltdown the metal counter triggered the weakness in the market. Tata Steel slipped by 1.61%, amid reports that the company may bid for Africa-focused Riversdale Mining. Aluminium maker Hindalco lost 1.81%.

However, copper producer Sterlite Industries bucked the trend with a gain of 0.95%.

Six straight sessions of losses in engineering and construction heavyweight Larsen & Toubro (L&T) weighed heavily on the broader gauge. The scrip went down by 1.09% to settle at Rs1,935.40.

"We will have the F&O expiry next week, there is a chance that one may get to see some action in the market. No major events are lined up over the next few days before the Q3 results start trickling in. So, don't expect the market to do much in the interim period unless there is a major development - either in India or abroad," IIFL Head of Research Amar Ambani said.

Among the gainers, power major NTPC rose 1.50%. IT giant Infosys Technologies too went up by 0.77%.

Consumer durables and metal indices were the biggest turn-off for the broader market. Consumer Durables index lost 1.11 per cent, led by Videocon which lost 1.45 per cent.

Metal index fell by 0.97%.

The market breadth turned negative as 1,479 shares ended with losses and 1,331 shares finished with gains at BSE.