Heavyweights drag markets lower

Heavyweights dragged the markets down into the red, erasing all the gains of this morning. The Sensex after a firm opening had touched 18,967 -its highest in two months. However, weakness is select counters saw it giving up its gains. The index was up 40 points at 18,855 - dropping over 110 points from the day's high. Nifty was up six points at 5,650.

Heavyweights - Infosys and Reliance contributed 25 points each to the Sensex's downmove. While RIL shed 1% at Rs 1,015, Infosys tumbled 1.3% to Rs 3,120. Reliance had earlier jumped in trades after announcing a JV with D E Shaw group for financial services business.

"The IT sector is expected give around 10-15% returns for the year, which is reasonable. We like Infosys from a medium-term perspective and HCL Technologies as a long-term bet," says Harendra Kumar, Head Institutional Equities & Global Research, Elara Capital.

As per provisional figures, foreign institutional investors (FIIs) bought shares worth Rs 1446.18 crore on Friday. The markets may remain volatile this week ahead of the derivatives expiry. Year-end reshuffling of positions by traders may also keep the markets choppy.

BSE healthcare index tumbled 1% to 5,905. The IT and oil & gas space shed 0.7% each in trades, followed by metal and realty. However, BSE bankex gained smartly and was up 1% at 13,049.

"Almost all banking stocks has seen has seen rise in Oi and sharp buying continuing on every dip indicating limited downside. However, overall rally has stretched a bit so we may seen some pullback but it can be taken as an opportunity for going long," says Nandish Patel, Derivative Analyst, Sharekhan.

Jaiprakash Associates was the biggest loser in the index and dropped 2.8% to Rs 88. Sterlite and Reliance Communications slipped around 2% each in trades. Among other stocks in the red were IT major TCS.

Meanwhile, Hindustan Unilever gained 2.2% at RS 277. Tata MOtors jumped 1.8% to Rs 1,203. NTPC, Larsen & Toubro and HDFC added 1.5% each. Reliance Infrastructure, BHEL, HDFC Bank and Bajaj Auto were also in green. Banking major, ICICI Bank held on to gains and was up 1.2% at RS 1,104. SBI was up 0.7% at Rs 2,729.