The indices slipped below important levels today. A bullish trend reversal happens above 5,800 on the Nifty

The market closed lower for the fourth consecutive day on fears that the Reserve Bank of India (RBI) will hike key rates at its monetary policy meeting next week, following sustained rise in food inflation.

In the morning, positive global cues helped the market open in the green, albeit with marginal gains. The Sensex was 84 points higher at 19,533 and the Nifty resumed trade at 5,851, up 17 points from the previous close.

The market scaled to its intra-day high in early trade, with the Sensex at 19,542 and the Nifty at 5,856. But the indices slipped following the announcement of a marginal rise in the weekly food inflation numbers. By the end of trading today, the Nifty dropped to below the 5,800 level. The market is now in a downward trend. Immediate support is at 5,750, and further down at 5,700.

The market was choppy throughout the session and the indices touched the day's lows in the last half hour. The Sensex fell by 183 points to 19,266 and the Nifty was down by 57 points to 5,777. The indices closed below their psychological levels; the Sensex declined 157 points to 19,292 and the Nifty fell by 48 points to 5,785. The advance-decline ratio on the National Stock Exchange was 532:1123.

Among the broader indices, the BSE Mid-cap index fell by 0.97% and the BSE Small-cap index ended with a loss of 0.48%.

All sectoral gauges were in the red with rate-sensitive ones ending as the top losers. BSE Realty (down 3.03%), BSE Metal (down 1.20%), BSE IT (down 1.12%), BSE Capital Goods (down 1.06%) and BSE TECk (down 0.93%) led the losers.

ONGC (up 1.99%), ICICI Bank (up 0.92%), Bharti Airtel (up 0.56%), Bajaj Auto (up 0.26%) and Sterlite Industries (up 0.14%) were the gainers on the Sensex. Reliance Communications (down 5.13%), Cipla (down 2.77%), DLF (down 2.71%), Hero Honda (down 2.62%) and Jindal Steel (down 2.17%) were the major losers.

Food inflation inched up marginally to 8.76% for the week ended 16th April from 8.74% in the previous week. This is the second consecutive week that the rate of price rise of food items has gone up, after a period of moderation in February and March.

The latest rise, although marginal, will put more pressure on the government, which has described inflation as one of the major challenges facing the economy.

The RBI has said that deregulation of interest rates on savings banks accounts would benefit savers, as it would enable lenders to come out with innovative products to attract more funds from low income households. This was among its observations in a discussion paper on the deregulation of savings rates which it published today.

While the RBI deregulated interest rates on fixed deposit schemes in 1997, it continues to fix the rate on savings deposits. Presently, banks pay interest at the rate of 3.5% on saving accounts, which was fixed in 2003.

Markets in Asia, which opened on a positive note, tracking overnight gains in the US, settled mixed with the Chinese, Hong Kong and Taiwanese bourses closing in the red. Speculations were rife that China might curb property prices over the weekend.

The Bank of Japan, at the end of its policy meeting today, kept its policy rate unchanged in the range of zero to 0.1% and held off on additional monetary easing steps.

The Jakarta Composite rose 0.11%, the KLSE Composite gained 0.35%, the Nikkei 225 jumped 1.63%, the Straits Times and the Seoul Composite added 0.07% each. On the other hand, the Shanghai Composite tanked 1.29%, the Hang Seng fell by 0.37% and the Taiwan Weighted shed 0.09%.

Back home, foreign institutional investors were net sellers of stocks worth Rs711.86 crore on Wednesday, whereas domestic institutional investors were net buyers of shares worth Rs299.28 crore.