Markets opened flat following weakness in the global markets after Standard & Poor’s downgraded the US growth outlook. Banking shares were leading the gains while realty and auto shares weighed. The Nifty was down 4 points, at 5726 and the Sensex dipped 10 points, at 19,078.
US Markets overnight suffered the worst sell-off in a month after Standard & Poor’s changed its growth outlook on the US to negative due to mounting debt. The Dow Jones Industrial Average, the Standard & Poor’s 500 Index and the Nasdaq Composite lost 1.1% each.
Asian markets were also leading the losses in morning trades. Japan's Nikkei Stock Average was down 1.5% due to selling pressure in auto and technology shares. Hang Seng dipped 1.3% after crude prices dropped sharply dragging energy shares. Shanghai Composite was down 1.5%. South Korea's Kospi Composite fell 1%, Taiwan's weighted index was off 1.2% and Singapore's Strait Times slipped 0.9%.
Back in India markets posted second consecutive day of losses yesterday on concerns that companies may not meet their earnings growth expectations and high inflation levels may prompt the Reserve Bank of India to hike rates next month.
Technical analysts expect Nifty to move sideways for the next few weeks. PINC Research in its weekly note said, "Nifty may continue to vacillate in a trading range and remain volatile. Only if Nifty decisively breaches the 5930 mark which is the resistance for the trend line, there could be further upside." PINC Research has a positive view on the markets going forward and sees the current move in the short term, a part of its consolidation phase.
Realty shares were leading the losses, the index was down 0.6%. Indiabulls Real Estate was off 1.5%, Parsvnath Developers slid 1.3% and DB Realty fell 1.3%.
Banking shares were leading the gains, the BSE Bankex index was up 0.6%. IDBI Bank surged 2.4%, HDFC Bank surged
1.4% and Indusind Bank was up 1%.
Top gainers on the Sensex were HDFC Bank, up 1.3%, TCS advanced 1% and Reliance Communication gained 0.6%. The top losers were Hero Honda, down 1.4%, ONGC dipped 1.3% and ITC was off 1.3%.
The midcap and smallcap indices were up 0.3% each. Market breadth was marginally positive 879 stocks advanced for 860 stocks which declined.
