Markets remain volatile in a narrow range, IT drops

Benchmark indices are trading in a narrow range with Sensex and Nifty swinging between negative and positive zone.

At 11:00 AM, the 30-share Sensex was down 22 points at 21,113 and the 50-share Nifty was down 6 points at 6,267.     

Adds AK Prabhakar an Independent Market Analyst, “market looks bit weak for this month. Nifty can slip to 6000 around levels before any fresh rally can be seen. So, one has to be very stock specific. But for next 3-4 months I am very positive and any dip is a buy for a target of 6600 & 6850.”

Traders eye December wholesale price inflation, seen at 7% and due Wednesday, ahead of the central bank's rate review on January 28.

On the global front, Asian shares came under pressure on Tuesday, with Japanese stocks tumbling more than 2% as the yen hovered near a four-week high against the dollar after last week's surprisingly weak jobs report raised concerns about the US growth outlook.

Tokyo's Nikkei benchmark shed 2.6%, hitting a one-month low as investors there caught up to the fallout from the nonfarm payroll report following Monday's public holiday in Japan.

Back home, the Consumer Price Inflation for December fell sharply to 9.87% compared with 11.74% in November on account of decline in vegetable prices. Food inflation decreased to

Meanwhile, India's currency, debt and money markets will be closed today for a public holiday.

The partially convertible rupee closed on Monday at 61.55/56 per dollar compared with 61.89/90 on Friday.

On the sectoral front, BSE IT index has plunged by nearly 1%. However, BSE Capital Goods index has surged by over 1%.

The main gainers on the Sensex at this hour include L&T, M&M, HDFC, Coal India, Sesa Sterlite, Cipla, Hindalco, ITC and HDFC Bank.

On the losing side, Tata Motors, TCS, ONGC, Tata Steel and Wipro have declined between 1-2%.

IT stocks have fallen on profit-taking after the recent run-up on Infosys' better-than-expected quarterly results.

Ranbaxy Labs has plunged 1.6%, adding to Monday's 5.4% slump after the U.S. FDA raised concerns about the manufacturing practices at a factory owned by the company

Among other shares, CMC has tanked 8% at Rs 1,586 after reporting 4.8% quarter-on-quarter (qoq) growth in consolidated net profit at Rs 70.54 crore for the third quarter ended December 2013 (Q3). The company had profit of Rs 67.31 crore in September quarter.

Merck has gained 4.34% at Rs 576 after Reliance Mutual Fund bought 1.54% stake in the pharma company on Monday, 13 January 2014.

In the broader market, the BSE Mid-cap and the Small-cap index are up between 0.1-0.4%.

Market breadth in BSE remains positive with 988 gainers and 862 losers on the BSE.