RIL, ITC drag markets

Markets were lacklustre for most part of the day and ended in the negative zone owing to selling pressure in index heavyweights. The Sensex dropped into the negative zone in opening trades on political worries and then failed to recover. Sustained weakness in realty and oil & gas stocks saw the BSE benchmark index drop to a low of 18,694 - down 144 points from the day's open. The Sensex finally ended with a loss of 72 points at 18,743. The Nifty ended at 5,632 - down 18 points.

Political concerns once again rocked the state of Andhra Pradesh with nine MPs resigning to press their demands for a separate state of Telangana.

Foreign institutional investors (FIIs) bought shares worth a net Rs 1131.72 crore on Monday, taking their total investment value to around Rs 7,762 cr from June 23.

Asian markets ended on a flat note today with investors still wary about Europe's debt problem. The Hang Seng was down 0.1% while Nikkei and Shanghai Composite gained 0.1% each. The Nikkei eked out gains for the sixth straight day on hopes of an improving economic outlook. However, analysts expect the momentum to fade out soon.

BSE auto index continued to shine in an otherwise weak market. The index gained 1% after auto majors came out with data showing a better-than-expected jump in domestic sales. Ashok Leyland gained 4% at Rs 52. Mahindra & Mahindra jumped 2.5% to Rs 719. Apollo Tyres, Exide Industries and Tata Motors were up around 1-2% each.

IT index was up 0.5% at 6,184. IT major, Infosys is set to announce its Q1 results on July 12, thereby kick-starting the earnings season this month. The stock gained 0.5% at Rs 2,954. Wipro was up 1% while Patni Computers, Core Projects and HCL Tech jumped around 1% each.

However, weakness remained in realty, power and oil & gas stocks. The indices dropped 1-2% each in late-noon trades.

The BSE bankex fell to a low of 12,916 on profit taking with traders worrying that high inflation and rising interest rates would hurt future profits. However, the indices recoevered smartly in the last hour of trade to end up 0.5% at 13,047. ICICI Bank snapped nine-days of gains and was down marginally at Rs 1,099. IDBI Bank, Kotak Mahindra Bank, Federal Bank and Axis Bank were down in trades.

Idea Cellular dropped 2% to Rs 77 after a court ruling asked the company along with Spice Communications to surrender the overlapping licences of Punjab and Karnataka circles to the Department of Telecommunications.

Heavyweight, Reliance, declined 2.5% to Rs 846, contributing the most to the index's downmove. ITC shed 1.5% to Rs 196.

BHEL shed 4.5% following news that the Union Cabinet is likely to approve disinvestment of 5% of the government's equity in state-run equipment company next week. Among other PSUs, NTPC ended flat, ignoring reports that a panel set up by the environment ministry has held back clearance for NTPC's subsea gas pipeline in Kerala.

BSE market breadth was marginally positive. Out of 2,959 stocks traded, 1,502 advanced while 1,312 declined in trades.