Nifty struggles below 7650; ICICI Bank, Tata Motors down

Moneycontrol Bureau

11:45 am SEBI news: In a major crackdown on PACL, capital markets regulator Sebi has attached all assets of the company and its nine promoters and directors for their failure to refund more than Rs 60,000 crore due to investors - the biggest illegal mobilisation of funds. PACL had raised Rs 49,100 crore from nearly 5 crore investors that it needs to refund along with promised returns, interest payout and other charges, which take the total amount due to more than Rs 55,000 crore, Sebi said on Monday. Besides, PACL has another group firm PGFL which has "illegally mobilised more than Rs 5,000 crore and failed to refund the same in spite of directions of Sebi and SAT", the regulator said while initiating the recovery proceedings.

11:30 am FII view: Atsi Sheth, Associate Managing Director - Sovereign Risk Group, Moody's Investors Service, says India’s fiscal position has been vulnerable to one-off events and the implementation of the Seventh Pay Commission might pose a challenge in meeting the current fiscal deficit targets. The longer term view on India is constrained by food inflation, which has been a key driver of the consumer price index (CPI) along with supply side pressures, Sheth says, adding there’s a risk of monetary policy not being able to control food inflation.

The market is still under pressure as all eyes are on the FOMC tonight. The Sensex is down 20.34 points at 25130 and the Nifty is down 12.80 points at 7637.25. About 1221 shares have advanced, 812 shares declined, and 133 shares are unchanged.

Reliance, HUL, ONGC, Sun Pharma and Axis Bank are top gainers while ICICI Bank, Tata Motors, Wipro, BHEL and Hindalco are losers in the Sensex.

Gold is hit from overnight losses on Tuesday and the metal looked vulnerable to a drop back to multi-year lows on expectations of a US rate hike later this week.

The Federal Reserve will kick off its last policy meet of the year later on Tuesday. At the end of the two-day meet, the US central bank is widely expected to hike interest rates for the first time since June 2006.

Higher rates are expected to hurt demand for non-interest-paying bullion, while boosting the dollar. Gold has already slid 10 percent for the year, its third straight annual decline, in anticipation of higher rates.