Markets may edge lower for the second consecutive day tracking weak global cues as sovereign debt concerns in Europe resurface. The Nifty futures on the Singapore Exchange declined 40 points, 4,973.
Asian markets declined on Tuesday morning due to losses in financial shares on resurgence of sovereign debt woes. The Hang Seng index was down 1%, the Shanghai Composite index declined 0.3% and the Nikkei shed 1.3% in the morning trades. US markets were shut on Monday on account of Labour day holiday.
In Europe the cost of insurance against bank climbed to a record high which had a ripple effect on the banking shares. Risk aversion for equities resumed over worries that sovereign debt crisis would explode into a full blown financial crisis.
Back in India, “if the Nifty closes below 4,950 level, the index may drag towards 4,800 level support. On the upside, it caps an important resistance at 5,080 levels; if sustained with volume, support may gain momentum towards 5,120-5,240 levels," said Ashish Chaturmohta from IIFL Private Wealth.
On Monday, the Foreign Institutional Investors were net buyers of Rs 133 crore in cash and the Domestic Institutional Investors were net buyers of Rs 1,47 crore.
In the derivatives segment, FIIs were net sellers of 353 crore. They were net sellers of 566 crore in the index futures and Rs 113 crore in index options. On the other hand, they bought shares worth Rs 350 crore in the stock futures and sold shares worth Rs 23 crore in stock options.