Sensex down 211 as bears rule, Nifty at 7-mth low sub-5500

Benchmark indices nosedived after a firm start to close at a near 7-month low Tuesday, as the market prepares for what is likely to be a disappointing earnings season.

The Sensex closed at 18226, down 211.30 points over the previous close after touching a high of 18565.56 intra-day. The Nifty closed at 5495, down 47.85 points.

Brokers said a marked slowdown in buying by foreign institutional investors was causing the weakness.

So far this month, foreign funds have net sold Rs 671 crore of shares.

Global concerns over a possible nuclear test by North Korea is adding to the cautious mood in world markets, they said.

IT and oil & gas shares were the main laggards, while shares from the auto and metal sectors did relatively better.

Brokers say much of negative news has already been factored in, but the market lacks the positive triggers to take it higher.

Key events that could influence sentiment this week include consumer price inflation reading, index of industrial production, Infosys Q4 earnings and trade balance data.

Zee Entertainment, Eicher Motors, Castrol and Tata Motors and Castrol were among the key gainers, rising around 2 percent each.

ONGC, Infosys, PNB and State Bank of India were among the prominent losers, down 2-3 percent.

Brokers said domestic liquidity has all but dried up following the bruising sell off in midcap and small cap over the last couple of months.

This had made the market all the more vulnerable to any sudden withdrawal of funds by foreign institutional investors.

And while foreign investors have been steady buyers for a while now, factors like political uncertainty, weak economic indicators and lackluster earnings growth is holding them from committing more money.

Equity benchmarks slid deep into the red in the last hour of trading with ITC, Infosys, ONGC, Reliance and SBI falling more than 1 percent each.
 
At 14.27 hrs IST, the Sensex is down 120 points at 18315, and the Nifty down 22 points at 5520.

Jindal Steel, Tata Motors, HDFC, ICICI Bank and Larsen remained gainers at this hour, registering an upmove between 1.7 percent and 3 percent. Cairn India and Ambuja Cements were noticeable winners on the Nifty.

The midcap index too slipped in the red with IVRCL, Reliance Comm falling nearly 1 percent. Among gainers, Adani Power moved up 2 percent after the CERC order. The stock has corrected 34 percent in last 21 months.
 
In Asia, a selloff in the yen paused as it neared 100 to the dollar, while a firm start to the US corporate earnings season and a fall in Chinese inflation lifted share markets.

The Japanese currency hit 99.67 to the dollar in Asian trading, the greenback's strongest level versus the yen since May 2009, before the selloff ran out of steam. The euro stopped at a peak last seen in January 2010 of 129.94 yen.

In Europe, equity markets rose in early trading, led by mining stocks as investors hoped for more accommodative monetary policy from China following benign inflation data, and after US firm Alcoa posted solid earnings.

Equities perked up in afternoon trade after a positive start. The Nifty is trading volatile above 5550 level led by commodities and rate sensitive stocks. The broader markets too gained momentum. European shares have opened in green.

Shares of Anil Ambani-led Reliance Communication jumped 2 percent after CNBC-TV18 reported that Bahrain-based Batelco provided letter for Rs 6000 crore Reliance Globalcom deal. Sources say the deal will help RComm save Rs 700 crore per annum in interest costs.

Meanwhile, Capital goods, banks, metal, auto and realty stocks were leading the recovery for bulls. The Nifty had hit a fresh 6-month low of 5535 last week.

The Sensex is up 26 points at 18465 and the Nifty up 22 points at 5565.

The breadth of the market is also positive. About 1077 shares have advanced, 976 shares declined, and 1501 shares remain unchanged.

Jindal Steel, Tata Motors, Larsen, ICICI Bank and HDFC are top gainers.

Wipro, Bharti Airtel, Dr Reddys Labs, Infosys and ONGC are major laggards.

It is a positive session on the Dalal Street with the Nifty holding above 5,550. At 11.46 hrs IST, the Sensex is up 102.14 points at 18539.92, and the Nifty up 50.65 points at 5593.60. About 1043 shares advance, 860 shares decline, and 1651 shares remain unchanged.

Global cues are positive. Alcoa Inc reported higher quarterly profit, signalling a positive start to the US quarterly earnings season.

ICICI Bank up more than 2 percent after broking firm Morgan Stanley upgraded the stock to "overweight" from "equal-weight", citing an expected pick-up in consumer loan growth.

TCS gains on plans to buy French IT services firm Alti for 75 million euro.  Speaking to CNBC-TV18, the management says the acquisition underlines company's long-term, strategic commitment to France and will help them to accelerate growth there.

Cairn India rallies as the company discovers fresh oil in the Barmer field in Rajasthan. Credit Suisse has upgraded the stock to outperform from neutral, but have cut the target price to Rs 344.

Maharashtra Seamless gains almost 10% after the board approved buyback of shares worth Rs 100 crores at a price not exceeding Rs 300 a share. The management says they are sitting on Rs 550 crore cash & the buyback is a confidence building measure.

Jindal Steel (up 3.13%), ICICI Bank (up 2.84%), Tata Motors (up 2.43%), L&T (up 2.04%) and HDFC (up 1.93%) are the top gainers on the Sensex.

On the flip side, Wipro is the top loser on the Sensex, down more than 10 percent. Bharti Airtel (down 1.4%), Infosys (down 1.04%) Dr Reddys Labs (down 0.63%) and HDFC Bank (down 0.44%) were the other losers.

Meanwhile, the Indian rupee continues to be firm against the dollar and is quoting higher by 12 paise to 54.44 per dollar.

The Nifty is consolidating above 5550 level in the morning trade. The Sensex has lost most of its early gains on lack of buying interest. Selective buying is seen in metal, realty and auto stocks.

The Sensex is up 23 points at 18460 and the Nifty is up 23 points at 5566.

Jindal Steel, Tata Motors, ICICI Bank, Larsen and TCS are top gainers on the Sensex.

Wipro, Bharti Airtel, Dr Reddys Labs, Infosys and Reliance are top losers.

TCS will buy French IT services firm Alti for 75 million euros or Rs 530 crore in an all cash transaction. TCS says this will help boost presence in France and other European regions.

Alti SA clocked revenues of 126 million euros at the end of 2012 versus 64 million euros in 2007. The company has 1200 employees based in France, Belgium and Switzerland.

Wipro fell as much as 10 percent after the company got demerged as a standalone IT stock post splitting its other businesses into a separate unit.

The company's non IT Business which is a combination of Wipro Consumer Care and Lighting, Medical Equippments and Wipro Infrastructure Engineering would be transferred to an unlisted private entity called Wipro Enterprises.

Tata Motors is up 2 percent. In a CNBC-TV18 exclusive, sources say Jaguar Land Rover (JLR) is developing a 2 litre diesel engine for new SUV which will be the smallest engine from JLR till date. The new SUV will be a big volume driver for JLR in emerging markets.

It is a steady start for the market on the second day of this eventful week. Trade balance data (March), IIP numbers (February) and Infosys earnings (Jan-Mar quarter) are all slated to be announced this week.

Cues from the global markets are also supportive. Asian shares are trading in green while US and European markets ended with decent gains.

The Sensex is up 75 points at 18515 and the Nifty is up 35 points at 5577. 

Technical Analyst, Sudarshan Sukhani recommends traders to close out intermediate short positions. He advises to go long in the Nifty above 5575 with a stop loss of 5535.

Cairn India, Tata Motors, Jaiprakash Associates, DLF and Ambuja Cements are top gainers on the Nifty.

Dr Reddys Labs, Bharti Airtel, Infosys, Ranbaxy Labs and Sun Pharma are top losers.

Wipro is trading 8 percent lower post demerger. The company's non IT business which is a combination of Wipro Consumer Care and Lighting, Medical Equippments and Wipro Infrastructure Engineering would be transferred to an unlisted private entity called Wipro Enterprises.

Morgan Stanley has upgraded Reliance Communications to "overweight" from "equal-weight". The broking firm has revised earnings estimates upwards by 125 percent.

The Supreme Court has postponed the 2G trial court summon issued to Sunil Mittal's appearance in court to April 16. Mittal is the chairman and managing director of Bharti Airtel. The stock is down 1 percent.