Markets edge lower as heavyweights decline

ITC, RIL and L&T among the major losers

Markets extended losses in late morning trades as weakness in index heavyweights like ITC, Reliance Industries and L&T weighed on the indices. At 1140 hrs, the Sensex was down 40 points at 22,835 and the Nifty gave off 19 points to trade at 6,821.

However, there was some buying in the broader markets with the mid and smallcap indices up 0.1% each.

The benchmark indices had rallied to fresh all-time highs earlier this morning due to continued inflows on the FII front. But they have turned choppy thereafter, albeit within a range of around 100 points on the Sensex, as the market participants seek to establish the immediate direction at the beginning of the new May derivatives series.

The Asian markets are struggling this morning as the emerging crisis in Ukraine has soured the mood across the continent.  Hang Seng has dropped 0.7% and Straits Times is trading lower by 0.4%. However, Japan's Nikkei is up 0.7% and Shanghai Composite is trading virtually unchanged.

In economy-related news, the Indian Meteorological Department has forecasted below-average monsoons in much of South Asia, including India. This could weigh on the fragile economic recovery and lead to flaring-up of food inflation.

On the sectoral front, Oil & Gas and FMCG indices were down over 1% each were the top sectoral losers.

FMCG majors, ITC and HUL declined by over 1.5% each.

Oil & Gas and index heavyweight, Reliance Industries was down 1.6%. GAIL and ONGC slipped 0.8% and 0.2% respectively.

IT, Power and Capital Goods were the only other indices in red, down 0.1-0.4%.
Maruti Suzuki, NTPC, Cipla, Wipro, L&T and Hero MotoCorp down 0.8-1.5% were the notable losers.

On the other hand, Realty index gained over 2% and was the major sectoral gainer.

Mahindra & Mahindra up3%, also the top gainer among Sensex-30, rallied to its lifetime high on the NSE, after Credit Suisse upgraded its rating on M&M to "outperform" from "neutral".

“The investment bank says M&M’s four-wheeler autos and commercial vehicles will benefit from even a short-lived economic recovery, while the auto-maker has "undemanding valuations,” a Reuters report suggests.

HDFC, Dr Reddys Lab, BHEL, Bharti Airtel and SBI up 1-2% were the notable gainers.

The market breadth was negative on BSE. 1,204 stocks declined while 1,120 stocks advanced.