Mid-Day Mood | Indices erase opening gains on weak cues; Nifty near 19,100

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The benchmark Indian indices erased all the opening gains and slipped in the red around noon, tracking weakness in Asian markets. A drop in information technology (IT) stocks in the run-up to the US Federal Reserve's policy decision later this week also weighed on Sensex and Nifty.

At 12:15 pm, the Sensex was down 236.76 points or 0.37 percent at 63,875.89, and the Nifty was down 64.40 points or 0.34 percent at 19,076.50. About 1673 shares advanced, 1390 declined, and 96 shares traded unchanged.

"Buy-on-dips is the strategy that has worked well in this highly volatile market. In spite of multiple crises, risks and uncertainties, the market has been bouncing back smartly as is seen in the 290-point rally in Nifty in the last two days. Globally, stock markets have refused to discount the West Asian crisis aggravating into a global catastrophe impacting the markets," said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

Three signals from the market are significant: One, the dollar index is down 0.4 percent; two, crude is down 3 percent; and three, safe haven buying in gold is limited. The takeaway from these market signals is that the market is climbing all walls of worries and a collapse triggered by geopolitical events is unlikely.

What should investors do?

"Investors have to be cautious since this is a time of war and unexpected events may happen. Even while being cautious, investors can slowly accumulate high-quality largecap stocks where safety is high. Financials are fairly valued," Vijaykumar said.

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Stocks and sectors in focus

Shares of DCX Systems zoomed 11 percent, a day after the company's net profit for the September quarter of this fiscal more than doubled to Rs 20 crore. In the past six months, the stock of this wire and cable manufacturer surged 46 percent as against a 4 percent rise in the Sensex.

Blue Star shares rallied over 7 percent in early trade as the air-conditioner manufacturer reported a 66 percent on-year surge in net profit.

Shares of Inox Wind plunged over 7 percent after a large trade involving 10 percent equity took place on the exchanges. Around 3.2 crore shares of the company changed hands at an average price of Rs 210 apiece. The total deal value was around Rs 672 crore.

Sectorally, the Nifty PSU Bank and the Nifty Realty indices were the top gainers, trading up to 1 percent higher. The Nifty Oil & Gas, Nifty Healthcare, Nifty Pharma, Nifty IT, Nifty Metal and the Nifty Bank indices fell 0.5 to nearly 1 percent. On the flip side, the Nifty Auto, Nifty Financial Services, Nifty FMCG, and the Nifty Media were trading marginally higher.

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