Markets edged lower for the second consecutive day, tracking weak global cues, as sovereign debt concerns in Europe resurfaced. The Nifty opened in the red and was down 30 points at 4986, and the Sensex slipped 98 points at 16,647.
Asian markets declined on Tuesday morning due to losses in financial shares on resurgence of sovereign debt woes. The Hang Seng index was down 1%, the Shanghai Composite index declined 0.3% and the Nikkei shed 1.3% in the morning trades. The US markets were shut on Monday on account of Labour day holiday.
In Europe, the cost of insurance against bank climbed to a record high and this had a ripple effect on the banking shares. Risk aversion for equities resumed over worries that sovereign debt crisis would explode into a full blown financial crisis.
Back in India, “if the Nifty closes below 4,950 levels, the index may drag towards 4,800 level supports. On the upside, it caps an important resistance at 5,080 levels; if sustained with volume, support may gain momentum towards 5,120-5,240 levels," said Ashish Chaturmohta from IIFL Private Wealth.
On Monday, the foreign institutional investors were net buyers of Rs 133 crore and domestic institutional investors were net buyers of Rs 1,47 crore.
Among the sectoral indices, BSE IT and banking indices were leading the losses in morning trades, down almost 1% each.
From the IT space, Tech Mahindra slipped over 1%, Infosys and Mphasis was off 1%.
Investors also cashed out of midcap banks, Union bank was off 2%, Bank of Baroda and Punjab National Bank slipped over 1% each.
BSE Auto index was in top gear, up over 1%. Bajaj Auto zoomed over 1%, Hero Motor Corp added 1% and Ashok Leyland was up 0.5%.
From the broader markets, the midcap and the smallcap indices were trading marginally higher.
The top gainers on the Sensex were Maruti Suzuki, up 3%, followed by Bajaj Auto and Tata Motors, up over 1% each. Among the losers were Wipro, TCS and DLF, down over 1% each.
