Sensex ends marginally lower amid volatility; autos rally

The Sensex witnessed consolidation throughout the session and closed with modest loss, after two-day of rally. The volatility could be on account of F&O expiry on Thursday. Weak global cues also weighed on the markets. The sell-off in oil & gas exploration, power, metal, FMCG, select capital goods and banking & financial companies' shares kept the markets lower.

However, buying in telecom, technology, auto and oil marketing companies' shares along with L&T, Cipla and Ambuja Cements capped the losses to some extent.

Heavyweight Reliance Industries slipped 0.8% on profit booking, after a sharp run-up on Monday. ITC also fell over 1.8%.

However, Bharti Airtel bounced back 2.6% as it saw buying interest at lower levels. It had tumbled over 4% yesterday. Infosys was up over 1% as according to sources the company is in talks to acquire Europe based Ciber Novasoft and the deal value is likely to be between USD 200-300 million.

Sandeep Bhatia, ED and Head of Sales of Kotak Institutional Equities expected consolidation in telecom space by 2010-end. He said ITC could outperform in short-term while the stock could see some headwinds around budget time. He also expected banks to report good growth in H2.

Auto stocks continued their rally in today's trade as well. Maruti, Hero Honda and M&M gained 2.1-2.6%. Bajaj Auto and Tata Motors were up 0.6-1%. However, Ashok Leyland fell 2%.

The 30-share BSE Sensex closed at 17,131.08, down 49.10 points or 0.29% and the 50-share NSE Nifty lost 0.25% or 13 points, to settle at 5,090.55.

Today's new listing - Den Networks closed at Rs 163.10, down 16.36% as against its issue price of Rs 195 per share.

On the global front, European markets were trading 0.3-0.7% lower and the US index futures fell 0.25% each, at the time of writing this report.

Asian markets witnessed selling pressure in late trade. China's Shanghai lost 3.45%, as banking regulators have issued a stern warning to all banks of China to strictly comply with the capital requirements or there will be no sanctions which will be given to the banks. This has led to some nervousness in the Chinese market.

Morgan Stanley said monetary conditions remained very loose in China and does not expect aggressive government tightening until 2011. It sees asset price appreciation in China to continue.

Among other Asian markets, Hang Seng was down 1.5% and Nikkei down 1%. Straits Times, Jakarta and Kospi fell 0.4-0.8%. However, Taiwan Weighted gained 0.4%.

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