Nifty heading south, likely to snap four-day winning streak

Markets slumped in late trades, amid weak European cues, with oil and financial shares leading the decline along with Tata Motors

Markets slumped in late noon trades, amid weak European cues, weighed down by profit taking in oil and financial shares along with Tata Motors which had surged in the previous session.

At 2:40PM, Sensex is trading at 26,861 down 345 points while NIfty has shed 101 points at 8,045.

The BSE Mid Cap and Small Cap indices underperformed the benchmark indices down 1.3% and 1.6%, respectively.

Asian shares were trading mixed on Tuesday as better-than-expected data from China surprised market participants. Meanwhile, financial markets in Japan were closed for a public holiday on account Autumn Equinox.

The HSBC flash reading on manufacturing (PMI) for China in September increased to 50.5, from 50.2 in August easing worries of a contraction.

However, European shares were trading sharply lower after data showed that both manfacturing and services in September expanded at its slowest pace this year, raising concerns that the economy in the continent continues to struggle. The CAC-40, DAX and FTSE-100 were down 0.8-1.2% each.

The rupee is trading at 60.94 compared to Monday's close of 60.82 tracking weakness in equities and sale by foreign investors in the previous session.

On the sectoral front, BSE Realty is the top loser down over 4.2%. Further, BSE Metal, Capital Goods and Oil & Gas indices are down over 2%. Bankex has lost 1.5%.

In the metal pack, Hindalco is the top loser down 2% followed by Tata Steel, Coal India and Sesa Sterlite down between 0.3-1.5% shrugging off the encouraging manufacturing data from China. The HSBC/Markit Flash China Purchasing Managers' Index (PMI) rose to 50.5 in September from August's final reading of 50.2.

Index Heavyweight Tata Motors which gained nearly 4% as analysts remained on bullish on the stock has lost 1.5% in today’s trade. Also, M&M has dipped nearly 2% after Credit Suisse downgraded the stock to "neutral" from "outperform" saying the company's valuations are no longer "attractive". However, Maruti Suzuki and Hero Motocorp are up nearly 1%

In the Oil & gas space, ONGC, RIL and GAIL have declined between 1-2% on uncertainty on Gas price hike.

In the financial segment, ICICI Bank, Axis Bank and HDFC twins lost between 0.5-1.5%.

Commercial real estate developer DLF lost more than 4% after BNP Paribas downgraded DLF stock to "reduce" from "hold".

L&T, Cipla and Bharti Airtel are some of the notable names in red down between 1-2%.

On the flip side, shares of information technology (IT) are in demand after the S&P BSE IT index hit a record high in otherwise subdued market. Tata Consultancy Services (TCS), HCL Technologies and MindTree have hit their respective lifetime highs. Following the tandem, Wipro and Infosys have surged between 0.6-2.5%.

Fresh buying is visible in the FMCG space with ITC and HUL up 1%.

The government has withdrawn the drug pricing authority's powers that allowed it to fix the prices of medicines not deemed essential. The move comes after industry protests against the National Pharmaceutical Pricing Authority (NPPA) decision to impose price caps on more than 100 drugs. Dr Reddy’s Lab is up nearly 1% while Sun Pharma is trading flat with a positive bias.