Markets edge lower, realty recoups losses

Markets continue to trade lower led by weak Asian cues and selling pressure on telecom stocks. The Sensex has dipped 124 points to 19,275 and the Nifty has dropped 41 points to 5788.

While Indian markets ended higher after days of losses yesterday, analysts sound cautious as the rally was led by thin volumes. India Infoline Line in research note said, "Monday’s rebound came on low volume and the breadth too was not great. So, one should remain on guard as the key indices could stay sideways and range bound." Kishor Ostwal, CMD, CNI Research said, "expect bounce back from these levels, markets will test new highs within next two months."

Sell-off was seen across Asia in the morning session as investors were jittery on Europe's debt concerns spreading despite the weekend agreement on Ireland bailout and weak overnight cues from Wall Street. Shanghai Composite has fallen over 3%, Hong Kong's Heng Seng has dipped 0.4%. Financials suffered huge losses. Japan's Nikkei Stock Average has declined 1.2%, Taiwan Weighted bucked trend, up 0.9%. Seoul Composite has also been trading higher by 0.3%, as investors closely watched the US-South Korea joint naval exercise which will terminate on Wednesday.

Ongoing telecom scandal continued to weigh on Unitech and Videocon, down over 1% and 2.5% after Telecom Ministry said yesterday evening that it would send notices to 85 telcos that were given licenses to give reasons why the licenses should not be cancelled if they were not eligible.

Analysts  say that investors should look out for value buys from stocks which have been grappled in the telecom scam and bribe-for-loans probe. "The dip in Unitech is a good buying opportunity. Also, CLSA picked up 41-lakh shares of LIC Housing Finance that came under the scanner. Investors need to understand the value of stocks and not judge on what is shown to them. Sooner or later, the dust will settle down and stocks will move up, "Ostwal added. LIC Housing Finance is up 2.9% in the morning session.

Realty index pared losses, it is the prominent gainer in the morning session. Indiabulls Real Estate has risen 6.3%, Orbit Corporation
has gained 6.2% and DB Realty is up 5%. Realty sector has been in the spotlight for all the wrong reasons and was pummeled by investors in a bout of panic selling, but analysts say that some stocks offer a good buying opportunity. "The entire realty sector offers a good opportunity. I do not agree with reports that the realty prices will cool down by 20%," Ostwal said.

Top losers on the Sensex in the morning session are, Infosys, down 1.4%, ICICI Bank down 1.3% and Sterlite, down 1.3%.

Only 9 components on the Sensex are trading in the green. Among the telecom space, Bharti Airtel bucks trend, the stock has risen 1.9% and is one of the top gainers on Sensex, DLF pared losses, has gained 1.8% and BHEL is up 1.9%.

Among the stocks that are on the buzzer this morning, CEAT has surge 1.7% on expansion plans, Ispat Industries is up 7% on reports that Lakshmi N Mittal may be in talks to pick up stake in the company.

Broader markets are also trading marginally higher, BSE midcap index and smallcap index are up 0.3% each.