Markets turn weak, financials and FMCG shares drag

Benchmark indices have erased early gains and have turned flat after making a positive opening. Profit booking in finacials and FMCG shares have capped the upside.

By 10:10, the Sensex was higher by 12 points at 20,388 mark and the Nifty gained by 7 points at 6,070 levels.

Adds Kunal Bothra, Technical Analyst at LKP Securities, “We are heading into a crucial 6080 resistance on Nifty spot levels. I think, till the time Nifty does not break this band of 6080-6100 and close above that, it is advisable to be cautious on the short term. Being extremely stock specific could be a decent strategy looking at the volatility in the short term.”

On the global front, Japan's Nikkei share average rose to a one-week high on Monday morning, moving further away from a four-month low hit last week as gains on Wall Street and a softer yen underpinned sentiment.

Analysts said that foreign investors including macro funds are cautiously stepping back to buy recently-battered Japanese stocks as they keep an eye on key events this week. New Federal Reserve Chair Janet Yellen delivers her first testimony to the House on Tuesday and the senate on Thursday.

Back home, investors will closely watch key data including inflation and industrial production for hints on improvement in the economy.

Tata Motors, NMDC, JP Associates, Indraprastha Gas, India Cements, Essar Oil, BGR Energy and Apollo Hospitals will unveil their third quarter earnings today.  

Foreign institutional investors (FIIs) sold shares worth a net Rs 267.26 crore on Friday, as per provisional data from the stock exchanges.

On the sectoral front, BSE Realty index has surged by over 2% followed by counters like Metal and Healthcare, both gaining by nearly 1% each. Apart from Banks, Power and FMCG, all the major BSE sectoral indices are trading in positive zone.

The main gainers on the Sensex at this hour include Tata Steel, Sesa Sterlite, Dr Reddy’s Labs, Sun Pharma, BHEL, Wipro, Cipla, Hindalco and Tata Motors.

DLF has gained by nearly 5% after the company announced the sale of its luxury hospitality chain, Aman Resorts, back to the company's founder, Adrian Zecha, for $358 million. This is a higher valuation than DLF's earlier agreement with Zecha, where it had received a valuation of $300 million, in December 2012.

On the losing side, Bharti Airtel, HUL, NTPC, HDFC Bank and Bajaj Auto have declined between 0.9-1.4%.

Among other shares, Sterling Holiday Resorts (India) is trading higher by 3% at Rs 96 after Thomas Cook (India) made an open offer for buying up to 26% in the company for Rs 230 crore.

The broader markets are outperforming the benchmark indices- BSE Midcap and Smallcap indices are up between 0.3-0.5%.

The market breadth in BSE remains positive with 895 shares advancing and 578 shares declining.