FMCG heavyweights drag markets lower

ITC and Hindustan Unilever down 4% along with heavyweights Wipro,Tata Steel and L&T drag

Markets edged lower in noon deals on account of increased selling pressure in FMCG and IT heavyweights. At 1240 hrs, the Sensex was down 131 points at 19,960 and the Nifty gave off 37 points to trade at 5956.

Selling pressure continued to persist in the broader market space with both the mid and smallcap indices losing 0.6-0.7%.

In international markets, Asian stocks slipped from seven-week highs on Thursday after Wall Street buckled under profit-taking pressure and as investors retreated to the sidelines with the earnings season heating up.

MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.3%, having posted a seven-week closing high just a day earlier. Tokyo's Nikkei closed 1.1% lower at 14,562.9, continuing to find resistance ahead of the 15,000 mark.

The earnings season has kicked off in earnest in major financial centers including Japan, Europe and the United States, keeping markets in check as investors gauge the business outlooks amid challenging global growth prospects, including a slowdown in China.

The decline in Asian bourses came after the U.S. S&P 500 index shed 0.4%, a modest move and yet still the biggest fall in almost a month.

Back home, among the sectoral indices, Auto, Oil & Gas and Bankex indices were the only ones in the positive with gains between 0.1-0.7%.

Among the ones in the red, FMCG index was the top loser down nearly 3% followed by Power, Capital Goods, Metal, Realty, Consumer Durables, Health Care, PSU and IT indices which slipped 0.3-0.9%.

The top gainer among the Sensex-30 was Hero MotoCorp which zoomed up 4% after its adjusted operating margins for June-quarter came in at 14.85%, higher than the estimated 13%. Also, Macquarie upgraded the stock to 'outperform' from 'underperform' and raised its target price to Rs1,960 from Rs 1,250, citing attractive valuations.

Dr Reddys Lab, Mahindra & Mahindra, HDFC, ONGC, Gail India, Tata Motors, Infosys and Bajaj Auto 0.5-1.5%.

Among the ones in the red FMCG majors ITC and Hindustan Unilever which slipped 4% along with Wipro, Tata Power, BHEL, Sterlite, Coal India, Tata Steel and L&T which lost 1-5%.

The market breadth was negative. 1,280 stocks declined while 685 stocks advanced on the BSE.