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After hitting a record high in the opening deals, the benchmark indices were trading in red on account of profit taking at higher levels. Weakness in auto stocks like M&M, Tata Motors along with GAIL, ITC and TCS alone contributed to a 40 point cut seen on the Sensex.
At 1410 hrs, the Sensex was down 46 points at 27,819 and the Nifty lost 15 points to trade at 8,307. Earlier in the day, the Sensex had hit a high of 27,970 and the Nifty was at a peak of 8,351.
However, the broader markets continued to hold investor interest. The mid and smallcap indices were up 1% each, outperforming the BSE benchmark index which was down 0.2%.
Among macro economic data, factory activity expanded at a modest pace in October, as stronger demand led manufacturers to add jobs for the first time in four months and allowed them to raise prices, a business survey showed on Monday.
The HSBC Manufacturing Purchasing Managers' Index (PMI), compiled by Markit, rose to 51.6 in October from 51.0 in September. The index has now been above the 50 level that indicates an expansion in activity for a year.
The rupee was trading at 61.41, almost unchanged versus its previous close of 61.39/40. Custodian banks are selling dollars for their foreign fund clients.
Sectors & Stocks
On the sectoral front, Auto, Consumer Durables indices were down over a percent each along with FMCG and Health Care indices down 0.4% and 0.1% respectively.
Among the ones in green, Realty index was the top gainer, up 3.5% followed by Banking index up 0.5%.
Shares of most of the frontline automobiles companies were in red after reporting drop in vehicle sales during the month of October. M&M, Maruti, Bajaj Auto, Hero MotoCorp and Tata Motors down 1-3% were the draggers in this space and were also the top losers among the Sensex scrips.
Real estate and infrastructure scrips attracted investor interest as the government relaxed foreign direct investment (FDI) rules in the construction sector by reducing minimum built up area as well as capital requirement and easing exit norms. Some of the gainers in this space were Unitech, HDIL, Indiabulls Real Estate, DB Realty and Anant Raj up 3-11%.
Among the Sensex-30, financial names like Axis Bank, ICICI Bank, SBI and HDFC were the top gainers up 0.2-1.5%.
Sesa Sterlite, Dr Reddys, RIL, Infosys and L&T up 0.4-2% were the other notable gainers.
On the other hand, GAIL, Coal India, NTPC and BHEL down 1-5% were the notable losers.
The market breadth was positive on BSE. 1,710 stocks advanced while 1,156 stocks declined.
Global Markets
Asian markets were mixed as investors digested a series of Chinese data. The Japanese markets were closed for a holiday.
China's services sector grew at its slowest pace in nine months in October as a cooling property sector weighed on demand, a survey showed on Monday, adding to signs of fragility in the world's second-largest economy.
The official non-manufacturing Purchasing Managers' Index (PMI) fell to 53.8 in October from September's 54.0, which was the weakest reading since January, the National Bureau of Statistics said.
Straits Times, Taiwan Weighed and Shanghai Composite were up 0.3-0.4% while Hang Seng, Kospi and Jakarta Composite slipped 0.3-0.6%.
European markets had a tepid opening with all the major indices trading flat almost unchanged.
