Markets open soft on global cues

Markets have opened in the red following weak cues from global markets. Sensex touched a low of 17,537 in opening trades but has now recovered to 17,647 - down 58 points. Nifty is down 21 points at 5,305.

Global stock markets tumbled on Monday as renewed doubts about the euro zone's debt crisis plan last week put an abrupt end to their October rally.

A stronger dollar following Japan's intervention to weaken the yen also stoked selling in equities, commodities and other risky assets and buying in low-risk government bonds. On the domestic front, the markets will also react to a fall in core sector growth that hit a 30-month low. The eight crucial sectors, having a weight of almost 38 per cent in the I-I-P, grew by just 2.3 per cent in September year-on-year.

The Dow Jones industrial average dropped 276.10 points, or 2.26%, to 11,955. The Standard & Poor's 500 Index fell 31.79 points, or 2.47%, to 1,253. The Nasdaq Composite Index lost 52.74 points, or 1.93%, to 2,684. In a sign that Europe's woes were far from over, Italian and Spanish bond yields soared, prompting the European Central Bank to buy the debt, while shares of European banks came under heavy selling pressure. Asian markets are trading weak this morning. The Hang Seng slipped 1.6% to 19,543. Nikkei was down 1% at 8,892.

Most of the sectoral indices are in red with metal sharesleading the decline. BSE metal index slipped 1% to 11,766. Capital goods, realty and FMCG indices were down around 1% each.

"The trend deciding level for the day is 17,729 / 5,334 levels. If Nifty trades above this level during the first half-an-hour of trade then we may witness a further rally up to 17,789 – 17,874 / 5,353 – 5,379 levels. However, if Nifty trades below 17,729 / 5,334 levels for the first half-an-hour of trade then it may correct up to 17,644– 17,584 / 5,307 – 5,288 levels," Angel Broking said in a research note.

Sterlite dropped 2.7% to Rs 124. Hindalco and Tata Steel slipped 1.4% each while Jindal Steel dropped 1% in opening trades. Larsen & Toubro is the major dragger and is down 1.5% at Rs 1,390.

From the FMCG pack, ITC slipped 1.4% at Rs 210. Hindustan Unilever after yesterday's smart rally, was down 0.3% at Rs 374.

Reliance dropped 0.5% to Rs 873 after RIL put speculations to rest after denying reports of acquiring US-based Valero Energy Corp.

Meanwhile, Sun Pharma has gained 2% at Rs 514. Wipro added 1.8% to Rs 373. Tata Motors, BHEL and ONGC are up in trades. Bajaj Auto in up marginally ahead of its sales numbers.

Among other stocks, NMDC reported a 42 per cent rise in its September 2011 quarter net profit at 1,963.15 crore. The stock has surged 4.7% to Rs 248.

EIH gained 2.7% to Rs 96.60 after the company reported a net profit of Rs 16.59 crore for the second quarter ended September 30, compared to a net loss of Rs 15 crore in the same period last year. Net sales zoomed 11.02 per cent to Rs 217 crore. Nita Ambani has been appointed as an additional director of the company on Monday.