Markets continued to trade lower after opening in the red due to weakness in auto and metal shares. The S&P CNX Nifty was down 18 points, at 5.498 and the benchmark Sensex declined 54 points, at 18,317.
--------------------------Updated at 09:30 hours
Markets edged lower in the opening trades due to weak global cues and concerns over inflation on expectations that the government may hike fuel prices this week.
The S&P CNX Nifty declined 20 points, 5.497 and the benchmark Sensex was off 60 points, at 18,314.
Analysts expect the markets to fall further if the government hikes the diesel and kerosene prices more than Rs 3 per litre. High levels for inflation may prompt the Reserve Bank of India to raise rates again in the upcoming policy on the 9th of June.
Also, there are fresh concerns of policy paralysis in the upcoming parliament session after the latest developments Congress-led United Progressive Alliance (UPA) to disperse agitation led by Ramdev Baba, a yoga guru Government may not be able to push through the long waited reforms.
Even markets across Asia were trading in red following weak nonfarm par data reported on Friday. Japan’s Nikkei Stock Average was down 0.9%. Singapore’s Straits Times Index dipped 0.4%. Markets in Hong Kong, Shaghai and Seoul were shut for the day on account of holiday.
Back in fund flows from FIIs (Foreign Institutional Investors) continue to remain subdued. FIIs bought shares worth a net Rs 445.26 crore on Friday while Domestic institutional investors sold shares worth Rs 355.51 crore.
Among the sectoral indices, BSE Auto shares were trading weak this morning; the index was down 7%. Investors booked profits in auto shares after monthly sales last week fell to three year lows. Also consecutive rate hikes by RBI will continue to dent demand for vehicles. Top losers were Ashok Leyland slipped 4%, Tata Motors was down 1.3% and Maruti Suzuki declined 1.5%.
BSE Consumers Durables was leading the gains, up 0.3%. BSE Consumers Durables was leading the gains, up 0.3%. Gitanjali Gems advanced 0.7%, Titan Industries was off 0.5% and Whirlpool declined 0.4%.
The broader markets were trading in the red, the midcap and the smallcap indices were down 0.3% and 0.1% each.
Top losers on the Sensex were JP Associates, down 2.1%, DLF declined 1.7% and Maruti Suzuki was off 1.5%. Only 5 components on the Sensex were trading in the green, top gainers were HDFC, up 1.1%, HDFC Bank declined 0.6% and Cipla was off 0.5%.
Market breadth was negative 602 stocks declined, for 545 stocks which advanced.
