Markets subdued in morning trades

The Sensex has dropped to a low of 18,727 - up 33 points - after trading in the green for the first two hours of trade. Markets opened firm on the back of global cues and buying in select sectors. The BSE benchmark touched a high of 18,823 as FMCG index continued its rally, followed by realty and metal. The Nifty was flat at 5,608.

Asian markets rose this morning after the Greece parliament approved strict austerity measures to help them secure the next round of financial aid. The Hang Seng added 1.6% at 22,414. Shanghai Composite jumped 1% to 2,758. Nikkei and Taiwan were up marginally in trades.

Foreign Institutional Investors continued to buy shares in India. FIIs have bought shares worth Rs 4,313 crore, according to provisional figures (till June 28), in the last four days.

In other news, the governmenet is committed to achieve 9% annual growth, Prime Minister Manmohan Singh said at a media conference on Wednesday. With respect to food inflation, he said that his government had increased foodgrain procurement prices to a degree that had never been done before, and this was responsible for agriculture being in good shape. “We cannot force farmers to part with their produce at unremunerative prices.” He felt that if oil and other commodity prices came down, inflation would be no more than 6.5 per cent by March.

BSE consumer durables index jumped 2% to 6,704. FMCG, realty and bankex were up as well - with FMCG touching a new all time high of 4,026.

Reliance Industries jumped 1% to Rs 893 - the highest positive contributor to the Sensex. Hindustan Unilever surged 2% to Rs 338. Jaiprakash Associates gained 2.5% at Rs 80. Hero Honda, NTPC and Jindal Steel were up 1% each.

However, Bharti Airtel dropped 2.3% to Rs 392. Cipla slipped 2% to Rs 325. ONGC, Hindalco and Tata Motors were down 1% each.

After the derivatives expiry today, markets are likely to look at corporate results for direction. The Q1 quarterly numbers are likely to trickle in from July 8 (HDFC). IT major Infosys would announce Q1 numbers on July 12, 2011.

BSE market breadth was marginally positive. Out of 2,510 stocks traded, 1,298 have advanced while 1,093 have declined.