Markets opened lower following weak global cues and cautiousness prevailing ahead of the IT bellwether Infosys earnings on Tuesday. The S&P CNX Nifty declined 30 points, at 5,630 and the Sensex slipped 85 points, at 18,770.
On Friday Nifty index scaled to the 200-Day Moving Average (5,740), but slipped back due to selling pressure in late trades. Technical analysts expect the index to correct to 5,500 where there is a major support as the Nifty has retreated back in the falling trend line on the technical charts. The rally in the past two weeks has been merely an up move led by Foreign Institutional Investor fund flows of Rs 10,282 crore.
Markets will take cues from the Infosys results which will be announced on Tuesday. Emkay in the morning note said that Infosys will report revenue of $1,677 million or Rs 75,060 crore, up 4.7% q-o-q, and profit after tax of Rs 17,400 crore, down 4.5% q-o-q driven by lower operating margins. Operating margins may decline by 220 bps to 29.9% due to higher wage hikes. The company may raise FY12 EPS outlook marginally by 2-3% to Rs 128-131.
Asian markets were down in the morning session on back of dismal US economic outlook after disappointing jobs data reported on Friday. Also China's consumer price index scaled to high if 14.4%, stoking expectations that the Chinese government will continue its tightening process. Japan's Nikkei Stock Average declined 0.5%, Hong Kong's Hang Seng fell 0.8% and Shanghai's China Composite was down 0.2%.
BSE IT index was down 1% ahead of the Infosys results tomorrow. Infosys declined 2%, Tech Mahindra was down 1.4% and Wipro was off 1.3%.
BSE Consumer Durables index was up 0.4%. Bajaj Electricals was up 2.4%, VIP Industries advanced 2% and Gitanjali Gems gained 1.1%.
From the broader markets, the midcap and smallcap was down 0.1% each.
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Top gainers on the Sensex were ITC, was up 1%, ONGC gained 0.8% and NTPC advanced 0.8%. Among the losers, Hindalco declined 3%, Infosys fell 2% and Maruti Suzuki was off 2.1%.
From the broader markets, 785 stocks declined for 773 stocks which advanced.