 "Markets on a weak footing")
The markets are having another cautious session of trade, in what marks a third successive day of consolidation, due to weakness in metal and banking stocks. The Sensex retraced from the intra-day highs of 22,681 and is now at 22,524, weaker by 107 points and the Nifty is slipping closer to the technically important level of 6700 and is now at 6732, down 29 points. The hitherto-outperforming broader markets have also lost steam, with the midcap index losing eight points at 7429 and the smallcap index adding a mere four points at 7621 at 7651.
The markets had begun the proceedings on a promising note, with the benchmark indices actually making modest gains. But the unenthusing set of cues from the Asian front and global economic/political concerns seemed to have weighed on the sentiment on Dalal Street.
On the Asian front, Hong Kong's Hang Seng index was trading 0.07 per cent higher at 22,149.12. South Korea's Kospi index was trading 0.24 per cent lower at 1,965. China's Shanghai index was trading 0.16 per cent higher at 2,006.
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On the economy front, the weather phenomenon known as El Niño looms at a time when global supplies of many raw materials already are stretched in a development that threatens to drive up prices for food and other staples. El Nino refers to the abnormal warming of the Pacific Ocean waters in the equatorial tropical area. A change in the equatorial wind patterns triggered by El Nino can result in poor rains or a drought-like situation in Southeast Asia and Australia.
The India Meteorological Department (IMD) has already forecast that the total rainfall this monsoon will be only 95% of the 50-year average due to the El Nino effect. According to IMD's forecasting model, there is a 35% probability of normal monsoon, 33% probability of sub-normal monsoon and 23% probability of deficient monsoon.
There are resurgent tensions over Ukraine after Western leaders said they would impose new sanctions on Russia. President Barack Obama said on Monday the United States will impose additional sanctions on Russia targeting individuals and companies over the crisis in Ukraine, a move expected to be followed by separate sanctions from the European Union.
The rupee opened with marginal gains of 5 paise at 60.59 per dollar on Tuesday as against previous day's closing value of 60.64 a dollar.
On the technical front, Kunal Bothra, Technical Analyst, LKP Securities, told Smart Investor that the Nifty has a critical short term support at 6750. The Nifty may correct till 6675-6650 levels if the markets close below this level, he reckons.
Metals have lost lustre this morning. Tata Steel has lost 3.2% at Rs 412 and Hindalco has shed 1.8% at Rs 136. The private sector banks are also soft, with ICICI Bank shedding 1.2% at Rs 1257 and HDFC Bank losing 1.1% at Rs 716 and Axis Bank losing 0.6% at Rs 1520.
On the other hand, the IT pack is bucking the negative bias; Wipro has firmed up by 1.2% at Rs 535, TCS has added 0.4% at Rs 2200 and Infosys has added 0.3% at Rs 3188.
The market breadth is positive. Out of 2086 stocks traded on the BSE, there are 1027 advancing stocks as against 966 declines.