The benchmark indices extended losses in the late morning trades on account of weak global cues and selling in financials and auto counters. The BSE benchmark index, Sensex shed 291 points at 16,037 and the Nifty lost 87 points at 4,858.
In the broader markets, the midcap and the smallcap indices slipped 0.8% each but have managed to outperform the Sensex which is down nearly 2%
According to Somil Mehta,Sr Technical Analyst (Equity), Sharekhan, the bias for Nifty remains negative with key support around 4770 & 4500 and key resistance around 4980 and 5125.
Markets across Asia too are in the red as Greece failed to form a government, setting the stage for a re-election in June that could raise the risk of Athens abandoning the euro and deepening the euro zone's debt crisis. Hang Seng, Jakarta Composite, Kospi and Taiwan Weighted crashed 2% each followed by Nikkei and Straits down 1.5%.
Back home, selling pressure was witnessed across sectors with Auto, Metal, Power, Realty and Banking indices down 2% each. Oil&Gas index is the only exception which is flat with a positive bias.
Among the losers, Tata Motors slipped over 6% at Rs 272 after the company said its global sales remained flat in April at 87,377 units over the same period last year. Technical charts too suggest weakness and is expected to move down till 240 levels. Support for the scrip would be around 285 & 295 and resistance would be around 270 and 255, says Somil Mehta.
The other notable losers were HDFC, BHEL, Maruti Suzuki, ICICI Bank and DLF down between 3-4%
Gail India up 0.8% and ONCG marginally up at 0.2% are the only gainers among the Sensex stocks.
Among other stocks, Chettinad Cement Corporation has tanked 10% to Rs 718, its maximum down limit of the day, after its promoters set the floor price for delisting at Rs 540 a share, much below the current market price.
The market breadth is very negative. 1475 stocks declined as compared to 728 advanced on the BSE.