Capital goods, banking stocks drag markets

Markets continue to trade on a weak note and have extended losses in the noon deals led by the selling pressure visible in the capital goods and banking stocks. The Sensex has shed 135 points at 17,943 and the Nifty is down 47 points at 5,346.

According to AK Prabhakar, Senior Vice President (Equity Research), Anand Rathi, "The Nifty has broken out of the range and we feel that it is mainly a liquidity driven rally. These kinds of rallies also give very fast corrections. As it is difficult to time them, we are advising investors to invest in growth stocks that will perform well from a two-year time horizon."

"Any correction now would be a healthy one. One should be stock specific and play the market for the Budget. However, a dip below 5,400 can take the Nifty to around 5,000 levels closer to the Budget," adds Prabhakar.

The Asian markets were trading higher. Nikkei advanced 52 points to 9,647 levels, Hang Seng advanced 35 points to 21,413 and Shnghai was up 29 points to 2,438 levels.

Back home, HDFC is the top loser among the Sensex stocks, down 4.4% to Rs 669 after about 14.50 million shares of India's top mortgage lender, changed hands on the counter in block deals today. According to media reports, Citigroup Inc which holds around 145 million shares, or a 9.9% stake, in the company sold its entire stake at an average market price of Rs 670 per share via block deals.

L&T, index heavyweight Reliance Industries, ICICI Bank, HDFC Bank, SBI, DLF, BHEL, ONGC, Cipla and hero MotoCorp are also among the laggards, down 0.4-2.2% each.

On the other hand, Sterlite Industries is the top gainer, up 3.3% at Rs 119. Coal India, Hindalco, TCS, Jindal Steel, Infosys, Bharti Airtel and Tata Steel are also among some of the gainers.

Capital goods and banking stocks are amongst the worst hit in trades so far. The BSE Capital Goods index has shed nearly 2% or 194 points to 10,690 levels. ABB is the top loser among the capital goods stocks, down 5% to Rs 833. Suzlon Energy, Bharat Electricals, Punj Lloyd, Thermax, SKF India and Siemens are also among the losers from this space.

Bankex is down 216 points at 12,092 levels. Indusind Bank is leading the losers chart from the banking space, down 5% to Rs 298. Yes bank, Federal Bank, PNB, Canara Bank, IDBI Bank, Axis Bank and Bank of India are also among the losers from this pack.

Oil & Gas, Realty, Power, Healthcare, Auto and PSU indices are also trading lower down 0.3-1.2% each.

At the same time, consumer durables, metal, IT and FMCG stocks are witnessing some buying in trades so far.

Among the individual stocks, State Bank of India (SBI) is trading lower by 3% at Rs 2,201 after the Executive Committee of Central Board (ECCB) of the bank has fixed the issue price at Rs 2,191.69 per share for the proposed preferential issue to the government of India. The bank is planning to raise about Rs 7,900 crore by issuing shares on preferential basis.

Shasun Pharmaceuticals has surged 12% to Rs 90.90 on announcing fund raising plans by issue of equity shares to a private equity (PE) investor on preferential basis.

The broader markets are trading lower. The BSE mid-cap index is down 0.3% or 21 points at 6,319 levels and the small-cap index is down 12 points at 6,894 levels.

The overall breadth is negative as 1,538 stocks are declining while 1,075 are advancing.