Markets open lower; Fed stimulus woes weigh

Markets opened on a negative note this Tuesday on speculation that the Federal Reserve may soon reduce economic stimulus after US economy showed signs of recovery.

At 09:20AM, the 30-share Sensex dropped 98 points at 19,086  and the 50-share Nifty fell 41 points at 5,644 levels.

Foreign institutional investors bought Rs 333.5 million worth of local shares on Monday, exchange data showed, while domestic institutions were net sellers of Rs 3.03 billion of shares.

Meanwhile, the rupee opened lower against the US dollar on back of fresh buying of the greenback by banks and exporters on Tuesday. The currency traded at 61.12 a dollar from Monday's close of 60.88 at the Interbank Foreign Exchange Market.

Globally, the Institute for Supply Management’s non-manufacturing index for the US rose to 56 in July, beating the median estimate of 53.1 and June’s 52.2 reading.

Asian shares dropped to 2-week low after the Federal Reserve Bank of Dallas President Richard Fisher said the central bank is closer to slowing bond purchases that have stoked global equity gains.

Japan’s Nikkei declined 1.4 % to 14,064, Singapore Straits Times fell 0.8% to 3,215, China’s Shanghai Composite index was down 0.4%  at 2,041 while Hong Kong’s Hang Seng shed 1.5% to 21,879 today.

Domestically, among the key sectoral indices, FMCG indices gained while realty, banks, oil & gas, consumer durable  sectors declined on the BSE.

The gainers included counters such as HDFC  rising 0.6%, TCS and Wipro  gained 0.5% and 0.2% respectively, HUL  rose 0.1% on the BSE.

The laggards were BHEL declining 3%, Tata Steel shed 1.3%, Coal India dropped 1 % while ICICI Bank was down 1.4% on the BSE.

The broader markets traded lower with mid-caps and small-caps falling 0.1 per cent on the BSE.

The market breadth was negative. Out of 531 stocks traded, 357 stocks declined while 157 stocks declined on the BSE.