Market extends losses; TCS, RIL top index losers

Markets extended losses further as markets are in a correction mode after touching new highs recently. Key indices are expected to turn choppy later in the day as investors await the Index of Industrial Production for October to see if manufacturing activity picked up in October.  

Reliance, Tata Motors, ICICI Bank, TCS and ITC continue to weigh on benchmark indices. At 11:03am, the 30-share Bombay Stock Exchange (BSE) Sensex was down 125 points at 21,047 levels and the broader Nifty index of the National Stock Exchange (NSE) was off almost 40 points at 6,268 levels.

The rupee was lower at 61.62 versus its previous close of 61.245/255 on Wednesday, boosted by weakness in local and regional shares.

 

"A gap up, a new life high and a consolidation/correction thereafter, are a natural course of markets given the fact that the week after would be event heavy. IIp and Inflation data today with RBI and FED meets next week, markets are bound to trade in choppy terrain. The trend is likely to continue for the next week as well with supports placed in the zone of 6170-6250 levels. Rather than a buy on dips a wait and watch strategy would do well. Once the events are behind us a call could be taken on the next course of markets. Aggressive traders may use options to buy into the dips. Heavy leverage is best avoided on both sides.

Also, IIP data which will be released today may show a contraction in the factory output in October. A Reuters poll of 26 economists suggested that the industrial activity shrank 1.2% in October. This may pose a worry for the government who are relying heavily on a second half recovery in the economic activity across all the sectors.

Asian shares slipped to a 2-1/2 month low on Thursday on heightened expectations the Federal Reserve may act sooner than later to unwind its stimulus after a provisional budget deal in Washington eased some of the fiscal drag on the U.S. economy.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 1%, adding to Wednesday's 1.1% decline -- its sharpest one-day fall in three weeks.

In Tokyo, the benchmark Nikkei tumbled 1.6%, extending declines into a third day. Still, the index, powered by Tokyo's aggressive fiscal and monetary stimulus, has rallied nearly 47% so far this year, on track for its best yearly gain since 1972.

Back home, broader markets improved and both the mid and smallcap indices were turned flat with a positive bias, both outperforming the BSE benchmark index which was down 0.7%.

Back home, all the sectoral indices were in the red with a cut of atleast 0.1%.

Bankex, Metal and Capital Goods indices down 1% each were the major sectoral losers followed by Health Care, IT, Teck, Auto, Oil & Gas and Power indices down 0.5-0.9%.

Tata Power up 2.5%, BHEL and Gail India up 0.2% each were the only gainers among Sensex-30.

NTPC, HDFC and ONGC pared off its morning losses and were flat with a positive bias.

The advanced decline ratio continued to remain negative. 890 stocks declined while 794 stocks advanced on the BSE.