Weakness persists, Sensex down 220pts

The markets continued to witness intense selling pressure in the noon deals. The Sensex was at 16,612, lower by 228 points. The index had touched a low of 16,556. The S&P CNX Nifty continued to trade below the 5,000 levels, it had shed 67 points to 4,989.

According to Kunal Bothra technical analyst with LKP Securities, "On an intra-day basis the 5,015-5,020 level was very crucial since the last 2 days, and once the level was breached today the fall just intensified. I think we would retest and break the immediate low of 4,946, and then test 4,850 below that level."

Meanwhile, on the macro economic front the government announced the inflation for the week ended August 6. The food article inflation eased to 9.03% compared to 9.9% while fuel group inflation climbed to 13.13% versus 12.19% on a weekly basis.

Back to markets, most of the Sensex stock were trading in the negative territory. Jindal Steel was the top loser, the stock shed 4.6% to Rs 493. Wipro, ICICI Bank, TCS, Infosys, Tata Motors, Hindalco, State Bank of India, Sterlite Industries and Bajaj Auto were also trading lower by 2-4% each. On the other hand, DLF, Hero MotoCorp, HUL and ONGC were among the notable gainers.

Technology, banking and metal stocks were among the worst hit in trades thus far. The BSE IT index was down 4% or 207 points at 4,956. BSE banking index- bankex and metal indices were down nearly 3% each. Auto, PSU, Consumer Durables, Oil & Gas, Healthcare, Power and Capital Goods indices also reeled under the selling pressure. At the same time BSE Realty and FMCG indices managed to hold on to gains.

Tech Mahindra was the top loser among the IT stocks, down 6.4% to Rs 670. It was followed by HCL Tech, MphasiS, Wipro, TCS, Financial Technologies and Infosys, down over 3.5% each. Among the banking stocks, Bank of Baroda,  IDBI Bank, Axis Bank, ICICI Bank, Yes Bank, Punjab National Bank and Union Bank were the top losers among the banking stocks.

The broader markets were also trading on a weak note. The BSE mid-cap index declined 1.6% or 101 points to 6,240 and the small-cap index was at 7,217, lower by 122 points.

Overall breadth was extremely negative as 1,907 stocks were declining while mere 650 stocks were advancing.