Markets march lower on back of weak global cues and losses in metal shares. The Sensex has fallen 120 points to 20,186 and the Nifty has declined 41 points to 6079.
-------------------------------Updated 1015 pm
Analysts’ expect that markets may continue to fluctuate between gains and losses on raft of global data and valuation concerns."Markets are in a corrective mode because they are close to peak and valuations are expensive. Poor index of industrial production (IIP) data, rate hike concerns in China and liquidity crunch on back of Power Grid FPO are also weighing on the sentiment, "DD Sharma, Sr. Vice President – Research, Anand Rathi said.
Technical charts also indicate that the Nifty may trade in the negative. Ravi Nathani, technical analyst, said "intermediate trend is still down; traders should trade with the strict stop loss as markets are expected to be highly volatile." Sharma added, “until Nifty holds on above 6000 levels, markets will be in a short-term correction mode, and will recover fast. But, if the index breaches 6000, expect 5900 and 5700 on the downside."
Asian markets were also trading in the red as US markets ended marginally lower on concerns that the Federal Reserve may scale back its effort to stimulate the crippling economy. Fresh concerns of sovereign debt stemming from Euro zone’s Ireland also weighed. Markets in Hong Kong were trading flat and Shanghai Composite was off 0.7% dragged by losses in energy shares. South Korea's Seoul Composite slipped 0.8% after Bank of Korea increased the base rate by 25 bps to 2.5% to tame inflation, Strait Times was trading flat and Taiwan Weighted was up 0.3%.
Among the stocks on the move this morning, Bharti Airtel rose 2.7% after reports that Citigroup upgraded the stock to buy from hold. Mahindra Satyam dropped almost 13% after second quarter net profit plunged to Rs 23 cr versus Rs 98 cr in the first quarter and reports that Brokerage BNP Paribas downgraded the stock to hold from buy., currently the stock is down 8%. Others, such as Dabur India rose 1.2% after news that the company will acquire US based Namaste Laboratories.
Metal stocks were facing rough weather, Sesa Goa was off 1.3%, Sterlite fell 1.2% and Hindalco dipped 1.1%. IT stocks were dragged down by Tech Mahindra (2.6%), HCL Tech and Wipro (down 1.1% each) as Mahindra Satyam results played a spoilsport.
On the Sensex, Reliance Communication (up 1.8%), DLF, (up 1.2%) and Jaiprakash Associates, (up 0.6%) were the top gainers on the Sensex. Wipro (down 1.1%), Tata (down 1%) and HDFC Bank (down 1%) were the prominent losers.
Midcap and small cap indices were trading in the green, up 0.6% and 0.4%.
DD Sharma said such corrections offers retail investors an opportunity to buy the stocks at lower levels. Sharma is positive on Biocon and UTV Software from the midcap space. Biocon has risen 0.6% and UTV Software gained 0.7%.
Market breadth was positive, out of 2575 stocks traded, 1467 stocks advanced, while 1025 stocks declined.