Markets continue to trade weak;Sensex below 25,000

Markets continued to trade lower amid profit taking in IT major Infosys

Markets continued to trade weak in noon trades on Monday amid profit taking in IT major Infosys post its first quarter earnings last week.

At 1:20PM, the 30-share Sensex was down 80 points at 24,945 and the 50-share Nifty was down 17 points at 7,443.           .

The wholesale price index (WPI)-based inflation fell to a four-month low of 5.43% in June against 6.01% in the previous month as the rate of food price rise declined and ironically onions turned cheaper.

However, this may not dissuade RBI from maintaining a status quo on its policy rates next month since sub-normal monsoon threatened to result in a drought in parts of the country and geo-political crisis in west Asia.

The Indian rupee was trading lower at Rs 60 to the US dollar compared to Friday's close of Rs 59.93 tracking weakness in the domestic equity markets.

Most Asian markets were trading higher with the exception of Singapore. The Shanghai Composite was up nearly 1% and the Hang Seng was up 0.5%. The Nikkei ended up 0.9% while the Straits Times was down 0.2%.

BSE COnsumer Durables index was the top sectoral loser down 1.8% followed by IT, FMCG, Healthcare and Realty indices.

Jewellery shares were among the top losers in the consumer durables space with Titan, PC Jeweller and Rajesh Exports down 2-4% each.

Infosys was the top Sensex loser down 3% after rising 2.7% last week post its first quarter earnings. In rupee terms, gross sales fell by 1.5% as compared to last quarter which is a sign of worry for the company as in this quarters other peers would be showing better result as compared to last quarter, says analyst at WealthRays Securities. Europe contributes around 25% of total revenue, with the fall in revenue coming from Europe; achieving high growth will be a tough task for the company, says analyst.

FMCG shares which had risen last week also witnessed profit taking today. ITC was down nearly 1% after rising 3.8% last week while Hindustan Unilever was down 1.8% after gaining over 2.6% last week.

Other Sensex losers include, Sesa Sterlite, NTPC, Wipro and Bharti AIrtel among others.

Metal shares were among the top Sensex gainers with Hindalco up 3.5% and Tata Steel rising over 1%.

IT major TCS was up 1.2%, while index heavyweight Reliance Industries was up 0.3% and mortgage lender HDFC gained 0.2%.

Among other shares, Advani Hotels and Resorts (India) has hit the upper circuit of 20% at Rs 51.60 on the BSE on reports that ITC Hotels could be close to buying its property in Goa. According to an Economic Times report, ITC’s hotel division, ITC Hotels is close to acquiring the Ramada Caravela Beach Resort from Advani Hotels & Resorts.

In the broader market, the BSE Mid-cap index was down 0.4% and the Small-cap index was down 0.8%.

Market breadth was weak with 1,658 losers and 882 losers on the BSE.