Markets remain weak amid political uncertainty

Markets continued to remain weak in late morning trades on Wednesday, amid political uncertainty, with financials and oil shares leading the decline.

At 11:35AM Sensex was down 52 points at 18,956, and the Nifty slipped 28 points to 5,718 levels.
 
Major Asian markets were trading with gains while others were trading marginally lower. The Nikkei and Shanghai Composite were up 2% each while the Hang Seng was up 0.7%.

The Dravida Munnettra Kazhagam (DMK) withdrew from the United Progressive Alliance (UPA) yesterday, claiming UPA had betrayed the Tamils of Sri Lanka with its soft approach towards the Mahinda Rajapakse-led government in that country.

In the domestic market, Realty, Power, Consumer Durables, Bankex, Metal, Oil and Gas, Capital Goods indices were the top losers down 0.8-3% each.

Financial shares were down despite the 25 basis points repo rate cut by the central bank on Tuesday. Private banks continued to witness selling pressure. HDFC Bank and ICICI Bank were down 1% each while SBI and HDFC 0.5-1.5% each.

In the oil and gas space Reliance Industries slipped 0.7% while ONGC lost 1.7%. Other Sensex losers include, Infosys, L&T and Tata Motors among others.

Meanwhile, FMCG and pharma shares were among the Sensex gainers. Hindustan Unilever (HUL) is trading higher by 2.1% at Rs 463 after the UBS upgraded the stock to ‘Buy” from “Neutral”. “UBS upgraded HUL shares to "buy" from "neutral" and raised its target price to Rs 540 from Rs 500, citing expectations for a "strong" business outlook and the prospect of rising volumes for its products,” the Reuters report suggests. ITC was up 0.4%.

In the pharma segment, Sun Pharma extended gains and was up 0.6% while Cipla rose 1.8%.

Among other shares, Housing Development and Infrastructure Limited (HDIL) has tanked 10% to Rs 54.75 on back of heavy volumes on the bourses. According to report the Mumbai-based property developer might lose its airport redevelopment project in city where it is building homes for slum dwellers.

In the broader market, the BSE Mid-cap index was down 1.4% while BSE Small-cap index dropped 1.1%.

Market breadth was negative with 1,677 declines and 680 advances on the BSE.