Sensex moderately lower; oil & gas, IT support

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The market continued to trade moderately lower due to fall in SBI and ICICI Bank. Index heavyweights, however, Reliance, Infosys, ONGC and TCS were helping the market to stay near the 5600 level.

The BSE benchmark was down 39.44 points to 18,389.17 and the NSE benchmark slipped 20.20 points to 5,586.95.

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Shares of SBI, India's largest lender, fell 4% on asset quality concerns after reports that the bank is lending some money to Kingfisher Airlines (KFA) for operational expenses. I-T authorities had earlier frozen the airline's bank accounts. SBI had already restructured loans worth Rs 1,500 crore (given to one company - that accounts for as much as one fifth of fresh slippages in last quarter) in the third quarter of FY12 to maintain its asset quality.

ICICI Bank dropped nearly 2%. Among metals stocks, Sterlite Industries fell 3.5% for the second consecutive session today. JSPL and Tata Steel were down 1.5-2.5%.

Shares of country's largest realty firm DLF tanked 4%. Among others, L&T and Bharti Airtel fell 1-1.5%.

However, major largecaps like Reliance, TCS, Infosys, ITC, HDFC Bank, BHEL and ONGC gained 0.7-1.9%. Sun Pharma and Hero Motocorp were up 1.6%.

Stocks in news

Tata Communications gained nearly 5% as the company is going to announce the biggest partnership to date tomorrow.

IOB allots 17.1 crore and 3.09 crore equity shares to GoI and LIC, respectively at Rs 97.80/sh via preferential issue. The stock fell 1.5%.

Taj GVK gained 1.5% as the company is looking to raise Rs 70-75 cr via equity placement, reports CNBC-TV18 quoting sources.

At 10:25 hours IST: Volatile Nifty falls below 5600; SBI, ICICI Bank, L&T slip

The Nifty slipped below the 5600 level amid choppy trade, weighed down by banks and metals stocks. L&T and Bharti Airtel too were under pressure. However, oil & gas, technology and auto stocks were supporting the market. The Sensex fell 21 points to 18,407.33 and the Nifty slipped 11 points to 5,595.80.

Anil Manghnani of Modern Shares & Stock Brokers says investors need to be a little more cautious right now because volatility will increase based on the events at hand. The hefty premium indicates the market is getting too long and more and more shorts are getting sucked out of the system, he said in an interview to CNBC-TV18.

Shares of country's largest lender SBI fell more than 3% after Hindustan Times reports that Kingfisher Airlines will get Rs 1650 crore relief package from SBI. ICICI Bank too was down 1.8%.

Among others, Bharti, M&M, HUL, Tata Steel, DLF, Sterlite, NTPC and Jindal Steel dropped 0.8-1.9%.

However, shares of oil & gas majors and index heavyweights Reliance Industries and ONGC were up 1% & 2.6%, respectively.

Technology stocks like TCS, Infosys and Wipro gained 0.4-1%. Among auto stocks, Hero Motocorp, Tata Motors, Bajaj Auto and Maruti Suzuki climbed 0.3-0.9%.

In the capital goods space, BHEL rose 0.6% while L&T tumbled 1.5%.