Sensex, Nifty drop over 1%; India VIX up 22% this week

Key benchmarks lost over a percent each as traders unwound their long positions in the absence of institutional buying support. The BSE Sensex dropped over 200 points to close at the low point of the day at 19362.55.

The NSE Nifty shed over 60 points to close trade at 5851.20. The Nifty closed below its 100-day moving average of 5,855.

About 960 shares have advanced, 1904 shares declined, and 645 shares are unchanged.

The Nifty 5600 Put had added 17 lakh shares in open interest while Nifty 5600 Put added 26 lakh shares in OI. The India volatility index went up 22 percent this week.

Shares in Jet Airways India gain 1.3 percent, heading for a fourth day of gains, on market talk of a potential sale of parking slots in Brussels to Etihad Airways, dealers say.

Bears targeted midcaps afresh, betting on an overall weak sentiment near term. Shares like Welspun Corp, Core Education, Amtek and ABG Shipyard were down 5-10 percent.

However, investment advisor SP Tulsian of sptulsian.com does not expect to fall below 5800. Last week, there was a good rally of almost about 90-100 points on the Nifty and huge long positions got created, more specially in the bank and automobile stocks. That position seems to be getting liquidated and maybe shorts have also started building up.

On a fundamental basis, Tulsian expects, today or tomorrow, the market may see some value buying or maybe short covering emerging again on Friday.

For technical analyst Sudarshan Sukhani of s2analytics.com the recommendation remains the same: Take intraday trades on the short side. "At this point, for those who haven't done anything, there is a case for taking a short position on the Nifty. This short position is coming with some risk because we can see rallies immediately. That risk needs to be understood. Ideally, you want to buy Puts rather than go and sell Futures," he told CNBC-TV18 in an interview.

Brokers say conflicting economic indicators is keeping investors on the tenterhooks. Industrial output in January was better than expected at 2.4 percent, but consumer inflation continued to be above 10 percent, underscoring the problems in the economy.

Also, the general view is that current quarter corporate earnings could be worse than the preceding quarter. Brokers say investors are using rallies to book profits, in the hope of being able to buy back the shares at lower levels near term.

Top losers on the Sensex today: Hindalco (-3.67 percent), ICICI Bank (-3.25 percent), Bajaj Auto (-3.16 percent), Maruti Suzuki (-3.07 percent) and Jindal Steel (-2.84 percent).

Indices continued their slide, with brokers saying that traders were unwinding their long positions in the absence of institutional buying support.

The Sensex was down 192 points to 19372, and the Nifty was down 58 points to 5856.

Bears targeted midcaps afresh, betting on an overall weak sentiment near term. Shares like Welspun Corp, Core Education, Amtek and ABG Shipyard were down 5-10 percent.

There were more than three losers for every stock that gained.

Brokers say conflicting economic indicators is keeping investors on the tenterhooks. Industrial output in January was better than expected at 2.4 percent, but consumer inflation continued to be above 10 percent, underscoring the problems in the economy.

Also, the general view is that current quarter corporate earnings could be worse than the preceding quarter. Brokers say investors are using rallies to book profits, in the hope of being able to buy back the shares at lower levels near term.

Hindalco, ICICI Bank, ONGC, Jindal Steel and Maruti were among the prominent losers in the Sensex, down 2-3 percent.

It is a weak session for the markets with the Nifty struggling below 5,900. At 12.59 hrs IST, the Sensex lost 126.93 points at 19437 and the Nifty fell 41.40 points at 5872. About 863 shares advanced, 1697 shares declined, and 949 shares remain unchanged.

Technology, rate sensitives and metals stocks are among the big losers in trade today. ICICI Bank and Axis Bank fell1.84 percent and 2.41 percent respectively while mortgage lender HDFC was down 1.39 percent, after January industrial production and February CPI rose, paring some of the rate cut bets.

Traders say wholesale price-based inflation data, due on Thursday, would be crucial for cementing final views on monetary easing ahead of the central bank's policy review on March 19.

Tata Motors slipped more than a percent after the Deutsche Bank puts a sell on the stock with a target of Rs 275. Tata Motors February global wholesales have come in at 98,837 units while JLR sales stood at 35,485 units.

The broader market has also seen significant cut. Amtek India slipped 5.77% followed by India Tourism (5%), Ybrant Digital (4.92%), Oriental Bank (4.14%) and Jindal Saw (3.63%).

Meanwhile, Nalco is up 1.71% ahead of the EGoM meet that will decide on the floor price for the offer for sale. The government is likely to divest 12.5% stake. HUL and Sterlite Industries also gained more than a percent.

Globally, it's a weak session across most Asian markets.

Equity benchmarks continued to fall for the third straight day due to sustained selling by funds amid a weak trend in Asian regions.

The 30-share barometer Sensex, which had lost over 118 points in the previous two sessions, fell further by 107.13 points or 0.55% at 19457.79 at 10.45 AM tracking losses in consumer durable, auto and information technology stocks. Tata Motors and Maruti Suzuki in the auto space were trading down by 1.5 percent each and Infosys in the IT sector had lost nearly 2 percent, causing a serious blow to the market.

The wide-based National Stock Exchange index Nifty too declined by 33 points or 0.56% at 5881.10 with metal stocks like Hindalco slipping 2.6 percent and Jindal Steel falling 1.75 percent. Brokers said sustained selling by funds amid a weak trend in Asian regions mainly influenced the trading sentiment here.

In the Asian region, Japan's Nikkei Index was down by 0.51 per cent, while Hong Kong's Hang Seng index 0.84 per cent in early trade on Wednesday. However, the US Dow Jones Industrial Average ended 0.02 per cent higher on Tuesday.

Equity benchmarks opened lower, let down by metal, IT and infra stocks. The gap-down was expected as global cues have been weak. Asian stocks were swinging between gains and losses amid concerns that shares have risen too fast. US stocks closed lower on Tuesday in a quiet trade, but the Dow managed sixth straight day of record-high closings.

Back home, a few FMCG and pharma stocks look supportive in the morning. The midcap index has started off in the red, signaling a deeper damage-game was lurking in the corner. Midcap banks were seen struggling, although some of the road stocks were up marginally. PTC financial stood out in the morning trade with 7 percent gains. Jet Airways was also up, gaining around 10 percent in the last few trading sessions.

At 09.36 AM, the Sensex fell 109.88 points at 19455.04, and the Nifty slipped 35.75 points or 0.60% at 5878.35.

In the pharma space, Sun Pharma and Ranbaxy were top movers on the indices, trading with sub 1 percent gains. Other gainers include Tata Power, HUL, ITC and Power Grid.

Banking space remained a sore point with ICICI Bank, HDFC Bank and Axis Bank trading with over 1 percent cuts. SBI was down 0.43 percent.

Indian rupee opened at 54.14 against the US dollar, and appears steady a day before the inflation numbers are expected to come out. The currency had appreciated by 23 paise on Tuesday to end at nearly two-week high of 54.18 on dollar selling.