The markets are trading lower this morning tracking weak global markets after disappointing US jobs data and profit booking seeped in after three sessions of gains last week. The Nifty was down 50 points, at 4,992 and the Sensex slipped 160 points, at 16,656.
Selling pressure is seen in Infosys (down 2.2%), Reliance Industries (down 2.3%) and ICICI Bank (down 1.5%) after pullback last week in some of these frontline stocks was a bit overdone. The three heavyweights dragged the Sensex down by almost 90 points in the morning session.
Ashish Chaturmohta from IIFL Private Wealth said, "The Nifty has an immediate resistance at 5120 levels, sustaining above, which further short covering can be seen. On the downside, 4,970 holds as an important support, if breached can test 4920-4880 levels."
Going forward the markets will take cues from the Reserve Bank of India policy on rates mid September. Amar Ambani, Head of Research, IIFL -India private clients said, "The monsoon has picked up pace in the past few days but food inflation has crossed 10%, which is a cause for concern. The RBI is likely to hike the rates by another 25 bps on September 16. The crucial thing for the markets would be to see if the RBI signals an end to its tightening cycle or not."
On Friday, markets in the United States slumped 2% after data from Labor Department showed zero jobs growth in August, raising concerns that the US economy was still very fragile. In Asia, Nikkei, the Hang Seng slipped and the Shanghai Composite were down almost 2% each. Financial and exporter shares were leading the losses. On the global front, the European Central Bank meeting on interest rates, due on Thursday, will also be closely watched.
BSE IT index was the top loser, down over 2%. HCL Technologies was down 1.6%, TCS declined 1.5%, and Wipro was off 0.5% and
BSE Consumer Durable was the only index which was trading in the green, up 0.4%. Blue Star was the top gainer, up 1.7%, Gitanjali Gems added 1.6% and VIP Industries was up 1.2%.
From the broader markets, the midcap and the smallcap indices were down over 0.5% each.
Prominent losers on the Sensex were - Hindalco, down 2.5%, DLF slipped 1.9% and Sterlite declined 1.8%. Major gainers were Hero Motor Corp, up 1.5%, Cipla and Jindal Steel added 0.7%.
The Market breadth too is negative, 926 stocks declined for 826 advancing stocks.