Weakness persists dragged by financials

The stock markets continue to remain weak in noon trades on Wednesday on profit taking in financial and software shares. 

At 1PM, the Sensex was at 17,116, down 78 points and the Nifty declined 21 points to 5,178. The Sensex has touched a low of 17,062 and the Nifty touched 5,159 so far in intra-day trade today.

On the global front, Asian markets are trading mixed after data showed a mixed picture of manufacturing activity in China. Shanghai is down 1.1%, Hang Seng slipped 0.4% and Straits Times was down 0.6% while Nikkei, Kospi and Taiwan were marginally up.

India's largest private sector bank, ICICI Bank, continues to remain the top Sensex lower down 2% after the stock surged nearly 6% on Tuesday on the back of better-than-expected third quarter earnings.

India's largest mortgage lender, HDFC, was down 2% after reports that US-based private equity investor plans has sold some of its stake in the company through block deals. Meanwhile, group firm HDFC Bank was also down 1.5%.

Software shares were down on the back of weaker-than-expected economic reports from the US. Infosys was down 1.5% and TCS was down 1.6%.

Telecom shares were down after the Department of Telecom reportedly sent showcause notices to telecom firms for under reporting revenues in 2006-07, 2007-08. Bharti Airtel was down 1.7% and Idea Cellular was down 2%.

Index heavyweight Reliance Industries was up 0.6% as the company's share buyback programme starts from today.

Auto shares have rallied buoyed by the encouraging January sales reported by Maruti Suzuki. Tata Motors was up 1.7%, Mahindra & Mahindra gained 2.7% and Maruti Suzuki was up 2.3%.

The broader markets continue to outperform the benchmark indices. The Mid-cap index was up 0.4% and the SMall-cap index was up 0.8%.

Among other shares, Ipca Labs has soared 5% at Rs 314, extending its Tuesday’s 5% rally, after reporting strong 66% year-on-year (y-o-y) growth at operating level during the third quarter ended December 2011.

ABG Shipyard was up 5% at Rs 406 after the company received an order worth of Rs 500 crore for construction of vessels from the state-owned company Shipping Corporation of India (SCI).

The overall market breadth in BSE remains firm with 1,516 shares advancing and 1,063 shares declining.