Markets have a subdued morning; Nifty hovers at 8,300

At 9.20am, the Sensex was at 27,727, higher by 77 points or 0.2% and the Nifty was at 8,344, up 26 points.

The benchmark indices have surrendered their early gains and are now trading mildly in the negative as the uncertainty in Greece continues to rile the market participants.

At 9.35am, the Sensex was at 27,606, weaker by 38 points or 0.1% and the Nifty was at 8,313, down 5 points.

The broader markets are outperforming their largecap peers, with the BSE Midcap and Smallcap indices gaining 0.5% each at 10,601 and 11,012 respectively.

The benchmark indices had ended lower on Monday, amid weak global cues, after the failure of Greece and international creditors to reach an agreement over debt payments raised fears of Greece's exit from the euro zone. The Sensex had ended lower by 167 points and the Nifty had ended precariously above the 8,300 mark.

The India VIX has jumped the most in seven weeks, rallying around 10% on Monday and another 1% this morning to 17.45 to post its steepest gain since May 12 as Greece seems to be on the brink of defaulting on a looming debt payment. The Volatility index or VIX is a measure of protection premium traders are willing to pay for protection against a decline in the markets.

"If the Sensex manages to cross and hold the 27,700 zone, it may head towards 28,000. However, if it fails to hold the 27,500 levels, the selling pressure may drag the index towards 27,300 zones. If the Nifty manages to cross and hold above 8,330 zones, an upmove may be seen towards 8,380 and 8,420 zones. However, if it fails to hold 8250, bears may again over power the bulls and drag the index towards 8,180. Traders are required to remain cautious as the index is witnessing a lot of volatility on back of global news," Anand Rathi Equity Advisory said in a client note.

GLOBAL MARKETS

Asian stocks rose on Tuesday, post the carnage witnessed in the previous session. The Hang Seng, Nikkei and Straits Times gained 0.5%-1% each; China's Shanghai Composite, however, continued its losing spree by sinking another 4% in early trades.

US stocks fell sharply in heavy trading on Monday. The S&P 500 and the Dow had their worst day since October after a collapse in Greek bailout talks intensified fears that the country could be the first to exit the euro zone. The Dow Jones fell 350 points, or 1.9% to 17,596, the S&P 500 lost 43 points, or 2% to 2,057 and Nasdaq Composite dropped 122 points or 2.4% to 4,958.

The European indices, including the CAC, FTSE and DAX had ended lower between 2% and 4% each on Monday.

SECTORS AND STOCKS

The FMCG and metal pack is doing well this morning, while banking and auto stocks are out of favour.

In the FMCG pack, index heavyweight Hindustan Unilever has gained more than 1%, while Godrej Consumer Products, Britannia and Marico have gained 1-4% each.

In the metal space, Coal India, Vedanta and Tata Steel have added about 1% each.

On the other hand, banking stocks are seeing selling pressure with ICICI Bank, Axis Bank an d SBI losing 0.5%-1% each.

Among individual stocks, Coal India, Hindustan Unilever and Sun Pharma are the major gainers on the BSE, while NTPC, Tata Motors and Dr Reddy's head the loser's list.

Reliance Communications (RCom) is in talks with American Tower Company (ATC) and Carlyle to sell a majority stake in its tower subsidiary Reliance Infratel in the current financial year. The stock has gained 2% at Rs 63.

Bharat Petroleum Corporation Limited has acquired 19.97% stake from a financial institution which was an investor in Petronet CCK Limited (PCCKL). The shares of BPCL gained 1% at Rs 880.

The market breadth is strong. Out of 1504 stocks traded on the BSE, there are 943 advancing stocks as against 509 declines.