India : Sensex falls 400pts, Nifty below 8750; ICICI down 3%, Infosys up

The market remained under pressure in morning trade, though it recovered a bit from day’s low. All sectoral indices except IT slipped into red.

The 30-share BSE Sensex was down 398.34 points or 1.38 percent at 28398.91 and the 50-share NSE Nifty fell 129.10 points or 1.46 percent to 8737.60. About four shares declined for every share advancing on the BSE.

Infosys outperformed, extending gains further. The stock was up over a percent whereas ICICI Bank, HDFC, Tata Motors, Axis Bank, ITC, L&T and SBI were top contributors to Sensex’s fall, down 1-3 percent.

Global markets fell sharply amid concerns central banks will become less accomodative and as investors cautious ahead of Federal Reserve’s policy meeting next week.

Andrew Sheets of Morgan Stanley said the brokerage house thought the risks of a Fed rate hike this year are manageable, and would be more concerned that the European Central Bank disappointed dovish expectations.

Sheets continued to expect developed markets and China growth to disappoint, with the rest of emerging markets doing relatively better.

India’s consumer inflation is expected to have eased to a four-month low in August, helped by smaller rises in food prices, but it likely remains too high for a rate cut next month when the central bank’s new governor presents his first policy review.

Consumer prices, which the Reserve Bank of India tracks as it sets interest rate policy, likely rose 5.5 percent in August, according to a Reuters poll of economists, compared with an increase of 6.07 percent in July.

Data on the consumer price index and industrial output will be released at 1200 GMT Monday.

Economists predict annual growth in industrial output decelerated to 1.7 percent in July from June’s eight-month high of 2.1 percent.

Even if retail inflation eases as much as anticipated, it will still be above the RBI’s March 2017 target of 5 percent, despite low global crude prices.