The markets are having a volatile session of trade post the astounding 600+ (Sensex) gains in the previous session. The Sensex has swung in a range of more than 300 points and is currently at 18341, lower by 104 points or 0.5% and the Nifty is at 5487, down 35 points. The midcap index is at 6560, down 16 points and the smallcap index is flat, with a negative bias, at 7996.
The markets had a gap-down opening as they would have attempted to catch up with their global peers after the holiday on Wednesday. The US markets had a rough time on Tuesday, although there was a marginal reversal in the previous session, due to the unabated strife in the Middle East and the boiling oil prices. There was a bounceback in mid-noon trades, with the benchmark indices hitting their highest levels in nearly two weeks, on easing food inflation and the buzz that the Libyan crisis may be heading towards a settlement, with Gaddafi reportedly agreeing to a peace plan proposed by Venezuelan President Hugo Chavez. But the unsustainability of the early gains registered on the European bourses seem to have had again dragged our indices lower.
Food inflation has declined by more than one percentage point to 10.39% for the week ended February 19, led by a drop in the prices of onions, potatoes and pulses. Food inflation stood at 11.49% in the previous reporting week and 21.62% in the corresponding period a year ago. According to data released by the government, prices of potatoes declined by 12.66% year-on-year, while pulses fell by 5.02%, onions by 3.64% and wheat by 2.06%.
Across the European continent, the FTSE, DAX and CAC pared their early gains, but are still trading in the positive. The Asian markets ended on a firm note, with the Seoul Composite adding more than 2%, while the Hang Seng and the Nikkei adding upto half a percent each.
Reliance Infra has weakened by 3.4% at Rs 597 to emerge as the top loser on the BSE. Bharti Airtel has shed 2.8% at Rs 328 and Infosys has lost 2.6% at Rs 3006. The metal sector is also taking it on the chin, with Sterlite, Hindalco and Tata Steel losing more than 2% each.
On the other hand, the underdogs seem to be making a mark, with Tata Power gaining 2.9% at Rs 1190 and RCom gaining 2.8% at Rs 92. The financials are continuing their good run; HDFC has strengthened by 2.4% at Rs 666 and HDFC Bank has added 1.8% at Rs 2175.
The market breadth is negative. Out of 2865 stocks traded on the BSE, there are 1226 advancing stocks as against 1546 declines.