Nifty struggles below 8900; HDFC Bank, Lupin, RIL support

The market remained under pressure in morning trade following weakness in global markets post Fed meet and ahead of big offer for sale of Coal India on Friday. Banking & financials, metals, telecom and select technology stocks dragged the market while Reliance Industries, HDFC and L&T supported the market.

The Sensex fell 150.68 points to 29408.50 while the Nifty lost 42.45 points to 8871.85 ahead of expiry of January derivative contracts today. However, the broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising marginally.

Yogesh Radke, head of quantitative research at Edelweiss Securities is of the view that with rights issues, offer for sale, divestments, fund raising in the pipeline, there could be large supply in the market, so one needs to be a bit cautious at present and unwind long leverage positions.

The leverage positions in the Futures market have gone as high as Rs 1 lakh crore, he adds.

In an interview he says, although the India story is still intact, the Nifty is likely to consolidate or correct around 4 percent and see levels of 8600-8500. According to him 9000 levels would act as strong resistance.

Coal India dropped nearly 4 percent ahead of stake sale by the government tomorrow. HDFC, ICICI Bank, Sun Pharma, ONGC, Bharti Airtel and Mahindra & Mahindra declined 1.4-2.4 percent.

However, HDFC Bank and Lupin gained more than a percent on CCEA clearance for foreign investment in company. Reliance Industries climbed over a percent followed by L&T, HUL, Wipro and Hero Motocorp with 0.3-0.9 percent upside.

Dr Reddy's Labs gained 0.4 percent ahead of Q3 earnings. According to a poll, profit is expected to fall 13.6 percent year-on-year to Rs 534.3 crore.

Nifty drifts below 8950, Sensex flat; HDFC rises 3%

1:45 pm Defaulter? Jaiprakash Power Ventures said it was likely to default on payments for convertible bonds worth USD 200 million due on February 13 this year, as it could not generate enough revenue from its operations. Jaiprakash, which has been weighed down by debts and a sharp downturn in the performance of the Indian power sector, said in a statement on Wednesday the company was confident of its ability to pay its dues under the bonds by March 31, 2016.

1:30 pm Result: Aban Offshore beat street expectations by reporting a 62 percent growth (year-on-year in consolidated net profit at Rs 130 crore. Good operational performance due to decline in expenses pushed the bottomline higher.

Profit was expected at Rs 85 crore on revenue of Rs 992 crore for the quarter, according to the average of estimates of analysts polled.

Consolidated total income of the offshore drilling services provider (to oil companies) grew 1 percent to Rs 1,003 crore in the quarter ended December 2014 from Rs 994.3 crore in same quarter of last fiscal.

Total expenses slipped 1 percent on yearly basis to Rs 669.78 crore during the quarter due to lower cost of materials consumed, rental charges for machinery and insurance cost.

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The market started to skid after the Nifty almost touching 9000-level. The 50-share index is up 15.10 points at 8925.60 ahead of Jan F&O series expiry tomorrow. The Sensex is up 42.56 points at 29613.60. About 1073 shares have advanced, 1583 shares declined, and 254 shares are unchanged.

HDFC is up 3 percent followed by Maruti, ICICI Bank, Coal India and SBI. Among the losers are Bharti, Tata Motors, Sesa Sterlite, Tata Steel and Tata Power.

Analysts say traders are cautious because of the Fed's first two-day policy meeting of the year that concludes tonight, and policymakers will likely restate their "patient" approach to raising rates, while also voicing faith that the economy will continue improving.

The Federal Reserve is expected to signal it remains on track to begin raising interest rates later this year, as the central bank shows confidence that low inflation and rising risks from abroad have yet to derail the US economic recovery.  

In typhoon-ravaged Tacloban, another storm forces Pope Francis

Braving stiff winds and heavy rains in a yellow rain coat during an open-air mass in Tacloban earlier in the morning, Francis attempted to comfort worshippers still reeling from the Nov. 8, 2013, storm, which remains the strongest ever recorded on land, according to BBC News. Ignoring his prepared remarks at one point, Francis addressed the crowd of 150,000 Catholics gathered in a field near the airport in his native Spanish, which “he reverts to when he wants to speak from the heart,” according to the AP.