Lacklustre trend prevails

Markets are trading on a lacklustre note in the noon deals. The Sensex is down 37 points at 16,115 and the Nifty is at 4,850, down 16 points.

The Indian markets opened marginally lower trades today, weighed down by S&P’s downgrade of nine European economies on Friday, a move that may have more symbolic than fundamental financial impact but which serves as a reminder that Europe’s economic woes are far from over.

European market opening would be closely watched after the Friday's S&P's downgrade.

Meanwhile, on the macro-economic front the government announced the inflation data for the month of December. The overall inflation for the month of December 2011, dropped to a two-year low of 7.47% from 9.11% in the previous month.

While food inflation declined sharply to 0.74% as against 8.54% in November 2011, fuel inflation also dipped marginally to 14.91% as compared to 15.48% in the month before.

The declining trend was seen in primary articles inflation as well at 3.07% vs 8.53% month-on-month.

Back to markets, Hormuz Maloo, Technical Analyst with Geojit BNP Paribas Securities says strong support for Nifty exists around 4,800 levels. "We have been in a short term uptrend for the last two weeks. There is a minor resistance formed at the high of last week - though there is no sell signal received as yet. Support for the Nifty currently exists at 4,800. The short term uptrend can be deemed intact as long as the Nifty remains above 4800."

DLF is the top loser among the Sensex stocks, down 2% to Rs 192. Reliance Industries has also shed nearly 2% to Rs 718. NTPC, HUL, Larsen & Toubro, HDFC Bank, Sun Pharma, Gail India, HDFC, Cipla, Jindal Steel, ICICI Bank and State Bank of India are also trading lower by 0.8-1.7% each.

However, TCS is the top gainer, up 2.3% at Rs 1,112. Infosys, Maruti Suzuki, Sterlite Industries, Bharti Airtel, Wipro, BHEL and Tata Power are also among the notable gainers.

Among the individual stocks, UB Group stocks – United Spirits and United Breweries – have rallied 5% each on reports that the group will consolidate its foreign alcohol assets ahead of an overseas listing of the brands.

Shares of fertiliser companies are in limelight on the bourses on reports that the government is planning to raise the price of urea by 40%.

CMC has rallied 7% to Rs 982 after reporting 27% quarter-on-quarter (q-o-q) growth in its consolidated net profit at Rs 41.37 for the third quarter ended December 2011. Revenue was up 8% at Rs 396 crore on q-o-q basis.

Oil & gas and banking stocks are amongst the worst hit in trades so far. The BSE Oil & Gas index has shed 1.3% or 101 points at 7,721 levels. Bankex is also down 1.2% or 125 points at 10,175. Realty, healthcare, capital goods, consumer durables, PSU, power and auto stocks are also under a mild selling pressure.

At the same time, technology stocks are facing a renewed buying interest. BSE IT index has advanced nearly 2% or 104 points to 5,587 and the Teck index has also jumped 1.6% to 3,332 levels. FMCG and metal stocks are also witnessing some bit of buying.

From the oil & gas space, Reliance Industries is the top loser. It is followed by Petronet LNG, Indian Oil, Gujarat Stete Petronet, ONGC, HPCL and Cairn India.

Among the IT stocks, Financial Technologies is the top gainer. The stock has advanced nearly 3% to Rs 632. HCL Technologies, Hexaware Technologies, Mphasis, Tech Mahindra and Core Projects are also among the gainers.

The broader markets are trading on a flat note. The BSE mid-cap index is down 15 points at 5,567 and the small-cap index has advanced 12 points to 6,183 points.

The overall market breadth is neutral as 1,254 stocks are declining while 1,197 are advancing.