Markets edged lower after a soft opening due to weakness in realty and IT shares. The S&P CNX Nifty was down 30 points, at 5,365 and the Sensex declined 100 points, at 17,911.
Analysts expect Nifty to take support at 5350, however if further shorts in the system remain, Nifty could drag further down in the short term. Shshank Mehta, Derivatives Strategist from Nirmal Bang said, "Nifty should gain some support from normal monsoons. According to the derivative data short rollovers were seen in banking, realty and cement counters."
Realty shares continued to weigh on the markets after DLF results missed street estimates after it posted 19% dip in the net profit for the fourth quarter. Mehta said, “Traders should be wary of short covering in the form of profit booking as realty counter has under-performed in the past few trading sessions.” Other losers were Orbit Corporation, down 3% and Sobha Developers plummeted 2.1%.
BSE IT index also remained weak in the morning session, down over 1% after reports of US probing Infosys for visa fraud and concerns over global growth resurfacing. Infosys slipped 1.5%, TCS also declined 1.5% and Infosys was off 4.6%.
---------------------------- Updated at 09:40 hrs
Markets opened lower tracking weak Asian peers and losses in realty shares after DLF net profit slipped 19%. The S&P CNX Nifty was down 18 points, at 5,376 and the Sensex was down 62 points, at 17,949.
In absence of any domestic triggers markets may continue to take direction from global cues such as the Euro zone debt restructuring and contagion woes which is currently denting investor sentiment said market analysts.
Buying by Foreign Institutional Investors has remained subdued as they bought shares worth only Rs 188.16 crore yesterday, while they have been net sellers of shares of Rs 5254 crore so far this month. Analysts said there has been no sectoral leadership as most of the sectors have been trading in the red, except for FMCG, up 0.9% month to date. Additionally Nifty has formed lower tops and lower bottom indicating weak trend ahead.
Volatility may also remain ahead of derivatives expiry this week. India Volatility Index, a measure of expected price swings that option traders perceive was at 19 level, down 0.3%.
Asian markets were also trading weak in the morning session following weak debut by Swiss commodity giant Glencore International PLC. Hong Kong’s Hang Seng dipped 0.6% over concerns of growth slowdown China weighing on the banking and resource related shares. Japan’s Nikkei stock average was also down 0.4% due to losses in technology shares as Yen advanced.
Back in India among individual stocks the country's largest realty firm DLF slipped 4% after it reported 19.2% fall in consolidated net profit to Rs 344.5 crore in fourth quaryer against Rs 426.4 crore in the corresponding quarter last year.
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BSE Realty was the top sectoral loser, down 2.1%. Orbit Corporation was off 2.3%, Unitech declined 1.6% and HDIL was off 1.5%.
IT shares were also weak on concerns over global growth. The BSE IT index was down 1%. Patni Computers was off 3.9%, Tech Mahindra slipped 1.2% and Infosys was also off 1.2%.
Consumer Durables witnessed some buying, the BSE index was up 0.5%. VIP Industries surged 1.5%, Blue Star was up 1% and Titan Industries advanced 0.8%.
From the broader markets midcap and smallcap indices were down 0.3% and 0.1% each. Market breadth was negative, 972 stocks declined for 692 stocks which advanced.