Markets slump; realty, metals weigh

The markets slumped on the back of selling pressure in realty and metal shares today. Weakness in the global markets and persistent selling in the banking space also weighed on the sentiment. The Sensex fell 238 points, at 19,697 and the Nifty declined 73 points, at 5904.

Broader markets have also witnessed selling pressure, mid-cap and small-cap indexes has declined 2.2% and 3.2% each.

Markets are expected to remain weak with Nifty seeing stiff resistance around 6100 level. Monal Desai, VP & Head–Inst Equities (Derivatives), Prabhudas Lilladher said "there is not enough enthusiasm to buy aggressively; hence upside is capped around the 6100 level. Technical analyst, Devangshu Dutta said,"the Nifty looks weak and could drop to 5850 or 5825 as 5900 is broken. Investors should start shorting and trade with a stop loss at 5925."

Asian markets also ended on a weak note due to the market wobble in Seoul following reports that North Korea might attack another South Korean Island which was later reported as a drill. South Korea's Seoul Composite ended down 0.4%, China's Shanghai Composite dropped 1%, Hong Kong's Heng Seng ended down 1.4%. Japan's Nikkei Stock Average was up 0.9% and Straight Times was up 0.3%. European markets were also trading lower due to losses in financial and mining shares.

Rally in Oil & Gas sector lost steam after rising sharply on reports that government may raise fuel prices by Rs 2 per litre after crude surpassed $90/bbl  yesterday. Hindustan Petroleum Corporation rose 3.2%, Bharat Petroleum Corporation extended 2.2% and Indian Oil Corporation advanced 0.7%.

While most of the sectors saw selling pressure today, fund houses remained bullish on India's consumption theme. Rajiv Anand, Managing Director and CEO, Axis Mutual Fund said, 'like domestic consumption as a theme, it is a secular play in India. Also Financial services will remain the core part of our portfolios, but are circumspect of global cyclical like commodities and oil and gas."

Banking index on Nifty touched a three-month low. Union Bank, Axis Bank and Canara Bank were down between 4-5%. Analysts said the recent fall in banking shares provides a good opportunity to enter. Desai reckoned, "banking index is overplayed at these levels. It is providing good entry points at for traders to make 4-5% profit."



Consumer Durables was the top sectoral loser; Gitanjali Gems was off 6.4%, Bajaj Electricals dropped 4.2% and Titan Industries declined 3.3%.

Metal stocks aslo lost sheen, Welspun Corporation lost 4.6%, SAIL plunged 2.8% and National Aluminium Corporation dipped 2.8%.

Realty stocks lost ground, Anant Raj Industries slipped 5.8%, Orbit Corporation declined 4.7% and DB Realty fell 4%.

On the Sensex HDFC Bank (down 3%), Reliance Communication (down 3.2%) and JP Associates (down 3.1%) were the top losers. Only 2 components on the Sensex ended in the green, ONGC (up 0.5%) and Tata Motors (up 0.3%).