Markets continue to trade weak; Nifty holds 7,500

Markets recovered marginally from their day's lows after oil and financial shares trimmed losses

Benchmark shares indices continue to trade weak but recovered marginally from their day's lows after oil and financial shares trimmed losses while gains in IT majors also helped improve sentiment.

At 2:25PM, the 30-share Sensex was down 93 points at 25,153 and the 50-share Nifty was down 30 points at 7,528.

Asian markets pared early gains and were trading lower with the exception of Nikkei which gained nearly 2%. Japan's benchmark index, the Nikkei ended over 4-month high up 1.6% at 15,361. Shares in China also witnessed selling pressure and the Shanghai Composite was down 1.6% while Hang Seng and Straits Times were trading with marginal losses.

European shares were trading higher after positive comments from the US Fed about the US economy. The CAC, DAX and FTSE were up 0.7% each.

Oil shares which witnessed selling pressure early today trimmed losses. Shares of oil and gas companies were under pressure, falling by up to 5% on media reports that the government may allow the higher gas price only for incremental production over and above the current levels.

The petroleum ministry has proposed that higher gas price as per the Rangarajan formula could be allowed only for incremental production over and above the current levels, as an alternative to applying the formula unconditionally from July 1, the Financial Express report suggests.

ONGC which was down 4.5% after dipping nearly 7% while Reliance Industries which had slipped over 2.5% was down 2%.

Financial shares also recovered on short covering at lower levels. SBI, ICICI Bank and HDFC Bank which were down over 1% each earlier are now trading 0.5% lower.

Meanwhile, IT majors which earn most of their revenues from exports to the US were trading higher following the US Fed's positive outlook on the US economy. Infosys was up 1.6%, TCS gained 0.7% and Wipro was up 1.4%.

FMCG shares which had witnessed profit taking in the previous sessions also firmed up. ITC was up 0.9% while Hindustan Unilever was up 0.3%.

Auto shares were also among the Sensex gainers today. Tata Motors was up 1.5% while M&M gained 1.6%.

In the broader market, the BSE Mid-cap index was trading lower with negative bias while the Small-cap index was up 0.2%.

Market breadth was nearly neutral with 1,450 losers and 1,410 gainers on the BSE.