Sensex slips on global cues...Volumes light

After enjoying two straight days of gains, the Indian markets yet again succumbed to fresh selling pressure on the back of deteriorating global market cues. The Nifty was unable to break into the positive terrain through-out the day after a slightly lower start. Although there was some recovery at a later stage, the benchmark equity indices were unable to sustain those gains amid selling in Pharma, Banking, Auto and Metals stocks.

Mid-Cap and Small-Cap stocks, which saw smart buying in the previous trading session, witnessed some profit booking today. However, bucking the negative trend were FMCG and Consumer Durables stocks.



Hero Honda, ONGC, Sun Pharma, Hindalco, Siemens,Dr Reddy, HDFC, Bajaj Auto, STER, Maruti, SAIL, SBIN, Ranbaxy, Ambuja Cement andHDFC Bank are among the laggards.

Reliance Comm, GAIL, Hindustan Unilever, NTPC,BPCL, Reliance Capital, ITC, TCS, CAIRN, Tata Power, Wipro, BHEL, DLF, SesaGoa, Axis Bank, HCL Tech, M&M and Tata Motors are among the gainers on theBSE and NSE.

Market players reacted negatively to US Federal Reserve chairman Ben Bernanke's remarks that the US economy will pick up in the second half of the year. But he also admitted that the economic recovery was proving to be uneven and frustratingly slow. Economic growth in the US has been below its potential, he said, adding that the second half of 2011 should see a recovery.

Sentiment in the Indian market was also hit as Bernanke didn't drop any hints about the possibility of a QE3 for the US economy.

"The decline came on fairly thin volumes, underscoring the ongoing lack of interest among the market participants amid near-term uncertainties. FII inflows have been very, very muted to have a major impact on the sentiment. The Centre's dithering on fuel prices and other important policy issues is another cause for trepidation. IIP, inflation and the RBI meet will be the near-term events to keep an eye on apart from the offshore developments," says Amar Ambani, Head of Research, IIFL - India Private Clients.

The BSE Sensex ended at 18,394 losing 101 points. It had earlier touched a day's high of 18,505 and a day's low of 18,365. It opened at 18,448. The NSE Nifty closed at 5,526 losing 29 points.

Outside the index, the major losers were SKS Micro, Financial Tech, MRPL, Sintex and Bhushan Steel. Among the major gainers were DB Realty, United Brew, Motherson Sumi and Tata Global.

Asian equity indices finished mostly lower but stocks in Japan and China managed to eke out slender gains. The Nikkei in Tokyo was up only 7 points while the Shanghai Composite index gained 0.2% at 2,881. The rest of the markets in Asia closed marginally lower.

The European markets were trading sharply down, with the FTSE index in the UK, the CAC 40 index in France and the DAX index in Germany down 1-1.5%.

In currencies, the yen is up amid an increase in risk aversion. Oil fell in New York, erasing earlier gains, amid speculation that OPEC will increase production quotas when it meets in Vienna.