Sensex ends down 38pts

Sensex ended (provisional) at 16,464 - down 38 points. Nifty ended down nine points at 4,937.
______________________________________
(Updated at 1426 hrs)

Markets have erased all the morning gains as European shares reversed direction and concerns of flagging domestic growth weighed on investors mind. The Nifty, after regaining the 5,000 mark in morning trades, fell into the red. The Nifty has now recovered and is now down five points at 4,941. Sensex is down 21 points at 16,481.

The markets surged in morning trades as investors took to buying shares in specific sectors. In Asia markets advanced in morning trades on hopes that China will buy the bonds from Italy. However, the positive sentiments faded quickly after a spike in Greek borrowing costs on escalating worries that the nation will default on its debts. Shanghai Composite dropped 1% to 2,471. Taiwan Weighted slipped 3% to 7,391. Nikkei, however, managed to hold on to gains and advanced 1% in trades.

Back in India, markets are likely to watch the corporate advance tax figures which is set to come out on Thursday. Friday's RBI credit policy review may also decide on the direction for the markets. The predominant opinion between economists seem to be that the RBI would increase rates one last time in its 18-month-long tightening cycle as inflation pressures continue to remain strong.

"Markets are likely to witness a range of 4,910-5,097 in the short term. For the Medium term only a move above 5161 would unfold a sustainable upmove. Traders would be adivsed to avoid huge leverage positions as the current week is of eventful nature and keep strict stop losses for trades on either sides," said Ranak Merchant from Sushil Financial Services.

ICICI Bank dropped 1.7% and was the biggest dragger among Sensex stocks. SBI was down 2.3% to Rs 1,826. Jaiprakash Associates, Stelite, Hindalco, ONGC and Mahindra & Mahindra shed 1-2% each.

Meanwhile, Bajaj Auto gained 1.4% at Rs 1,599. DLF added 1% to Rs 197. IT stocks held on to some gains with TCS and Wipro gaining 1% each. Infosys was up 0.5%.

BSE market breadth turned negative. Out of 2,822 stocks traded, 1,432 declined while 1,266 advanced on the BSE.