Markets open tad lower on weak global cues

Markets opened lower on Thursday, amid weak global cues, with bank shares extending losses after fresh restrictions by the RBI

Markets opened tad lower on Thursday, amid weak global cues, after investors booked profits in ICICI Bank and FMCG major ITC. Investors will also remain cautious ahead of expiry of July derivative contracts.

At 9:35AM, the 30-share Sensex was down 11 points at 20,080 and the 50-share Nifty was down 8 points at 5,982.

According to technical experts, the NSE Nifty may slip to 5,935 in the near term as key momentum oscillators have given a negative divergence on the daily charts. The 14-day RSI, ADX index and Stochastic Slow have all given a negative divergence today. The upside is likely to be capped around 6,120-odd levels. Today, the Nifty may seek support around 5,960-5,935, while face resistance around 6,020-6,040.

Asian stocks retreated from seven-week highs on Thursday as Wall Street buckled under profit-taking pressure, while upbeat US economic news helped the dollar snap a three-day slide. The Hang Seng, Shanghai Composite, Nikkei and Straits Times were down 0.3-0.9% each.

Shares on Wall Street ended tad lower on Wednesday, retreating further from their record highs on disappointing results from several top companies, while stronger-than-expected US and European factory data led to selling in safe-haven US and German government debt, sending their yields higher. Dow Jones lost 0.2%, S&P 500 ended 0.4% down while tech-laden Nadaq ended nearly unchanged.

The BSE Consumer Durables index was the top loser among the sectoral indices down 1.1% followed by Metal, Capital Goods, Power, Realty, Bankex, FMCG and Pharma.

In the banking pack, ICICI Bank and State Bank of India were down 0.1-0.3% each.

FMCG major ITC witnessed profit taking at higher levels after recent gains. ITC was down nearly 1%.

L&T continued to witness profit taking after the engineering congolomerate's first quarter earnings disappointed the street. The stock was down 0.4%.

Sun Pharma which has been in an uptrend also witnessed profit taking. The stock was down 0.3% at Rs 1,125.

Ambuja Cements has slumped nearly 14% to Rs 165 in early trades on BSE after reporting 31% year-on-year (yoy) decline in its June quarter profit to Rs 324 crore on higher input cost and lower realization. Net sales too decline about 9% yoy to Rs 324 crore due to weak demand in certain regions.EBITDA or operating margins contracted 700 bps to 21% as realisations remained lower.

Other Sensex losers include, Tata Motors, Tata Power, TCS and Mahindra & Mahindra.

The broader market was mixed with BSE Mid-cap index down 0.2% and Small-cap index up 0.05%.

Market breadth was nearly neutral with 477 losers and 431 gainers on the BSE.