Sensex sheds 92 as capital goods, FMCG weaken; L&T dn 3%

Key equity benchmarks declined Monday as investors chose to take some cash off the table as the market heads into the third quarter earnings season.

The Sensex fell 92 points to close at 19691, and the Nifty was down 27 points to 5988.

Capital goods, FMCG, realty and banking shares were on the casualties' list, while metal, pharma and select oil & gas shares did well.

Brokers said some amount of profit taking was inevitable considering the run-up in the last couple of months.

Also, there are not enough fundamental triggers to take the market higher from these levels, they said.

Closely watched events this week will be third quarter earnings of software services major Infosys, and index of industrial production, both due Friday.

HPCL shares rose 6 percent to Rs 332 as the government is considering a phased hike in fuel prices to cut its subsidy bill, and effectively, fiscal deficit.

However, most market participants are skeptical if the government will be able to to push through a meaningful hike, given political compulsions.

''Even if (phased fuel price hikes are) implemented, we doubt that the Government will be able to raise prices after 3QCY13, given several state elections in 4QCY13 and general elections in 2QCY14,'' brokerage house Kotak wrote in a note to clients.

After being rangebound for the most part of the session, the Indian market came under pressure in the afternoon trade. The Nifty slipped below the 6,000-mark, down 33 points or 0.55 percent. At 3.15 pm, the Sensex was trading at 19,676, down 106 points or 0.53 percent.

BPCL, Maruti Suzuki, Tata Steel, Cairn India and Cipla were the top gainers on the NSE.  Larsen, Jaiprakash Associates, HUL, HDFC Bank and HDFC were the top losers on the NSE.

World equities and oil prices eased on Monday as some investors booked profits after last week's strong gains, but optimism over the global growth outlook limited the falls.

Data from the United States on Friday showed employers kept up a steady pace of hiring in December and its vast services sector was expanding at a brisk rate, while manufacturing surveys pointed to growing activity in China.

This compounded the boost to markets last week when US lawmakers averted a budget crisis, at least for the moment.

"There is a lot of optimism in the market because the US 'fiscal cliff' has been avoided, Europe's debt crisis has eased and the Chinese economy seems to be growing again," said Koen De Leus, senior economist at KBC Group.

The FTSE Eurofirst index of top European shares was little changed near its 22-month high hit last week, while the MSCI's broad world equity index dipped 0.1 percent but remained close to an 18-month peak.

Market continued to trade flat although Nifty did not lose sight of the 6000 mark. Public sector Oil companies have continued to rally on diesel price hike hopes but sources say there is no certainty that the government will take a decision this week . The market is expecting Re 1 per month for 10 months, but experts say government may not do it in an election year.

Broader markets have cooled down since morning rally. At 1.26 PM, the Sensex was down 13.53 points or 0.07% at 19770.55, and the Nifty down 6.40 points or 0.11% at 6009.75.

Top gainers on the Nifty were BPCL (up 4.37 percent), Cairn India (2.02 percent), Maruti ( 3.25 percent)Cipla ( 2.94 percent), Hindalco (1.70 percent).

Meanwhile, Foreign Institutional Investors (FIIs) had bought shares worth Rs 1,164.41 crore last Friday, as per provisional data from the stock exchanges.

Asian stocks were trading higher in early trade, with key indices in China, Hong Kong, Singapore and Indonesia, trading 0.07-0.17 percent on strong US pay roll data led optimism over the global economic recovery.

Stock markets were trading flat although oil and gas stocks and auto major Maruti Suzuki were witnessing strong buying interest. At 11.05 AM, the Sensex was up 21.97 points or 0.11% at 19806.05, and the Nifty rose 5.70 points or 0.09% at 6021.85.

The gas producers companies were seeing an upmove following a recommendation to scrap government-controlled pricing mechanism. If accepted, the move will allow exploration in deep sea. Heavyweights BPCL, Cairn India, and IOC were trading with 2.79 percent, 2.40 percent and 1.79 percent gains while Reliance and ONGC appreciated 0.17 percent and 1.02 percent.

Maruti Suzuki remained the top gainer on the Sensex trading 3.24 percent higher at Rs 1593, buoyed by December sales numbers. Mahindra and Mahindra, Bajaj Auto and Tata Motorn were up 1.51 percent, 0.25 percent and 0.67 percent.

Banking stocks were trading flat to negative ahead of RBI policy meet on January 29. SBI, PNB, Bank of Baroda saw marginal upside of 0.26 percent, 0.29 percent and 0.35 percent. Private banks like Kotak Mahindra and Axis too were flat. HDFC remained top loser on the Sensex with 1.03 percent cut.

Index heavyweight Hindustan Lever was trading at Rs 529.20 down 0.85% from its previous close of Rs 533.75 and tech major Infosys was trading at Rs 2,361.00 up 0.54% from its previous close of Rs 2,348.30.