Sensex extends losses

Markets moved downwards once again. The Sensex shed 49 points at 18,345 after touching a new low of 18,327. Nifty slipped 22 points at 5,504.

Most of the sectoral indices indices dropped into red. The BSE auto index slipped 1% to 8,625. Healthcare, bankex and realty indices also moved down.
_______________________________
(Updated at 1133 hrs)
Markets coninued to trade in red, albeit off the morning lows. Weak Asian stocks had taken the Sensex to a low of 18,341 in mid-morning trades. However, the index recovered partially and was trading at 18,362 - down 32 points. Nifty was down 19 points at 5,507.

Global markets were in the red. The Hang Seng and Shanghai Composite slipped 1% each to 2,720 and 22,425, respectively.

Index heavyweight, Reliance Industries held on to gains. The stock was up 0.6% at Rs 953. The stock fell nearly 1% on Wednesday on reports that an increase in natural gas output from KG-D6 basin may not be possible in the next three years.

Among gainers, NTPC advanced 1.4% to Rs 177. Larsen & Toubro and TCS were up 1% each in trades.

BSE auto index was the biggest loser among sectoral indices - continuing its losing streak since Monday. The index shed 1% at 8,633. Among the stocks, Maruti Suzuki slipped 1% at Rs 1,213. The employees of the company's Manesar plant has been on strike for the past five days. The discontinuation of production has forced them to shut down their units, besides piling up inventory of auto parts.

Tata Motors was the biggest loser - down 2% at Rs 1,008. Hero Honda slipped 1% to Rs 1,749. Bajaj Auto dropped 0.5%.

Banking stocks were among the major draggers as shares of ICICI Bank, SBI fell on fears that RBI may again raise its key rates at its mid-quarter monetary policy review on 16 June.

SBI shed 1% at Rs 2,,268. HDFC Bank and ICICI Bank dropped marginally to Rs 2,346 and Rs 1,047, respectively.

"While rate sensitives face headwinds there are pockets of opportunities in financials, auto etc. Among the sectors we are cautious on are the  asset owners in the  Infrastructure sector and global commodities," said P.V.K Mohan, Head – Equity, Principal Mutual Fund.

The government's decision to deferr fuel pruce hike saw worries of inflation easing. However, PSU oil marketing companies dropped on th news. HPCL slipped 2.5% to Rs 372. BPCL and IOC were down 1.5% each at Rs 614 and Rs 319, respectively.

Among other losers were Reliance Communications, Jaiprakash Associates, ONGC, Wipro and Hindalco.

BSE market breadth was negative. Out of 2,460 stocks traded, 1,192 declined while 1,155 advanced.