Markets snapped four-day winning streak to end marginally lower, amid a volatile trading session on Wednesday, on profit booking with software technology shares leading the decline on the back of a stronger rupee.
The 30-share Sensex provisionally ended down 42 points at 16,423 and the 50-share Nifty ended down 22 points at 4,946
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(Updated at 14:52 hrs)
Markets continue to remain range bound amid volatility in late noon trades as gains in Reliance Industries failed to offset losses in software shares.
The Sensex has slipped 63 points to 16,408 levels and the Nifty is down 31 points at 4,936 levels. For the most part of the day the markets traded in a very narrow range.
According to Somil Mehta, senior technical analyst with Sharekhan, "Markets are seen consolidating after the rise in the past few sessions and the short-term bias is positive. The supports for the Nifty are at 4,900 and 4,800. Resistances for the Nifty are 5,010 and 5,100."
The Asian markets ended the day on a subdued note. The Shanghai Composite index ended lower 1.4% at 2,266 levels. Hang Seng ended higher by 0.3% at 19,686 and the Nikkei adavanced 1% to close at 8,550 levels.
Back home, Tata Steel is the top loser among the Sensex stocks, down 4.7% to Rs 422. Mahindra & Mahindra is trading lower by 3.75% at Rs 679 on reports that the Income Tax Appellate Tribunal has ordered Mahindra Intertrade, a M&M subsidiary, to pay Rs 3.6 crore penalty for concealing income and furnishing inaccurate details about earnings.
Coal India, TCS, Wipro, BHEL, ICICI Bank, Sterlite Industries, Gail India, Infosys, Jindal Steel and Cipla are also among the laggards on the Sensex.
Reliance Industries continue to trade on a strong note, up 4.5% at Rs 773 after the company announced buyback plans before the markets opened for trade today. Deven Choksey, MD and CEO, KR Choksey Securities is of the view that it as a positive move by the company ahead of its third quarter results whuich are to be announced on Friday.
"This is not an unexpected move. We expect the company to report a weak set of numbers for the December 2011 quarter and this announcement will allow the floor price of the stock to be maintained."
"Going ahead, the stock may see more downside. Fundamentally, the company is on a strong footing and I suggest that investors buy the stock on a decline and hold for the long-term." adds Choksey.
However, the Oil & Gas index is the only sectoral gainer, up 3% at 8,140 levels on the back of strong buying visible in index heavyweight Reliance Industries and ONGC.
ONGC was up 2% on reports that the state-run oil exploration firm is in talks with US energy firm, ConocoPhillips, to explore possibilities of joining hands for exploration of oil and gas in Indian deep sea and shale gas in North America.
Hero MotoCorp, HDFC Bank, DLF, HDFC, Tata Power, and SBI are also among the notable gainers.
Metal, Technology and PSU stocks are amongst the worst hit in late noon deals. BSE Metal index has shed 2.6% or 297 points at 10,874 levels.
Hindustan Zinc, SAIL, NMDC, Sesa Goa, Bhushan Steel and JSW Steel are the top losers from the metal pack.
IT stocks are facing selling pressure after the Indian rupee rose to a two-month high after foreign investors increased their investments in Indian debt and equities. The BSE IT index has shed 2.3% or 125 points at 5,509 points.
PSU, Power, Capital Goods, Auto, FMCG, Bankex, Healthcare and Consumer Durable indices have also reeling under the selling pressure.
The broader markets are also trading in the red. The BSE mid-cap and the small-cap indices are down nearly 1% each.
The overall breadth is extremely negative as 1,706 stocks are declining while 980 are advancing.