Markets opened in the red due to political instability, rising crude prices and subdued cues from Asia. The Nifty fell 57 points, at 5,481 and the Sensex slipped 170 points, at 18,321.
Investors turned jittery due to political instability after six ministers from Dravida Munnetra Kazagham (DMK), a key ally to the congress said that they will meet the Prime Minister today and hand over their resignation letters. The congress which is already beset by corruption charges will face another set back if it loses its key ally DMK.
Also, crude continued its uptrend on concerns that crisis in Libya would spread to the oil producing neighbours. The Brent crude was hovering around $117/bbl.
Markets in Asia were trading mixed, Hong Kong market was choppy in the morning session, energy shares were leading the gains, while airline and property shares were trading in the red. Hang Seng Index was down 0.3%. Japan's Nikkei 225 Average was down 1.1% due to losses in exporter shares and blue chip stocks. Also, Seoul Composite and Taiwan Weighted were down 0.6% and 0.3%. On the other hand China's Shanghai Composite and Singapore's Strait Times bucked trend, were up 1% and 0.3% each.
According to the technical charts, Indian markets are indicisive. PINC Research in its weekly note said, "in the near term the trend is therefore likely to remain indecisive. From an overall perspective the Nifty can be considered positive as long as it stays above 5400. " The note added, "the markets may trade sideways for some time with high volatility. It is a wait and watch situation as the index is not gaining any directional thrust as yet."
Among the sectoral pack, BSE Banking and Auto shares were leading the losses, down over 1% each. From the auto pack, Ashok Leyland fell 3.2%, Mahindra & Mahindra slipped 3% and Tata Motors was down 2.7%. Investors cashed out of Axis Bank, down 2.9%, Yes Bank slipped 2.3% and Federal Bank was off 2.2%.
All the 30 components on the Sensex were trading in the red. Top losers on the Sensex were JP Associates, down 2.6%, Maruti fell 2.4% and Tata Motors was off 2.3%.
Broader markets were also leading the losses, midcap and smallcap indices were down 1.3% and 0.9% each. Market breadth was negative, 791 stocks declined for 292 stocks that advanced.