Sensex, Nifty trade in negative zone, slip over 1%

After rising substantially during the previous session, India's key benchmark equity indices -- S&P BSE Sensex and NSE Nifty50 -- declined sharply in early trade on Friday, which is evidently due to profit booking.

At 9.40 a.m., Sensex traded at 58,269 points, down 1.1 per cent or 657 points from the previous close, Nifty traded at 17,398 points, down 1.2 per cent or 207 points from the previous close.

Among stocks, Infosys, Tech Mahindra, Wipro, Titan, and Bajaj Finance were the top five losers in the early trade, NSE data showed. BPCL, IOC, Hindalco, Mahindra & Mahindra, and Coal India, on the other hand, were the top gainers.

Thursday Closure

The RBI MPC's decision to retain key lending rates buoyed Sensex and Nifty50 on Thursday. The Monetary Policy Committee (MPC) of the central bank maintained the repo rate, or short-term lending rate, for commercial banks, at 4 per cent.

Besides, the growth-oriented accommodative stance was retained to give a push to economic activity. Initially, indices opened with a marginal up-gap, but fell soon thereafter to make an intra day low. They later rose after the RBI's announcement.

Globally, a tech-fuelled global stocks rally cooled in Asia on Thursday as investors took a more cautious posture amid uncertainties around the outlook for inflation and interest rates.

However, European stock markets climbed higher as investors digested a barrage of company results. On the domestic front, volumes on the NSE were back at recent average.

Among sectoral indices, power, metals and IT sectors gained the most whereas capital goods, consumer durables and auto lost the most.

Consequently, Sensex settled at 58,926.03 points, up 0.79 per cent or 460.06 points from the previous close, Nifty at 17,605.85 points, up 0.81 per cent or 142.05 points from the previous close.

"Nifty rose on Thursday but the advance decline ratio fell to almost equal suggesting that the broader market is refusing to participate in the same measure and the current rally may be running out of steam," said Deepak Jasani, Head of Retail Research, HDFC Securities.

"Nifty could face resistance at 17,706 while 17,477 could offer support in the near term. US inflation numbers for January due this evening and the response by the western markets to it will be watched keenly."

According to Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services: "Nifty has rallied almost 600 points in the last 3 days from a low of 17,043 on the back of value buying from domestic investors while reduced selling from FIIs."

(With inputs from IANS)