Auto, bank stocks drag market down in early trade

• The key benchmark indices declined to a new weekly low in opening trade, extending a seven-day decline, on lackluster global cues. A steeper than expected rate hike by the Reserve Bank of India on Tuesday and sustained selling drive by foreign institutional investors over the past few days played spoilsport. The BSE 30-share Sensex was down 81 points or 0.44% to 18,453.10. US markets were mixed on Tuesday on fears of lower earnings estimates and Asia equities were trading lower on Wednesday as select companies posted earnings that missed analysts’ estimates.

• As per provisional data, foreign institutional investors (FIIs) sold shares worth Rs 1178.66 crore and domestic institutional investors (DIIs) bought shares worth Rs 606.83 crore on Tuesday, 3 May 2011.

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• The market breadth, indicating the health of the market remained negative. On BSE, 832 shares advanced while 1257 shares declined. A total of 57 shares remained unchanged.

[caption id=“attachment_4144” align=“alignleft” width=“350” caption=“Shares of Bajaj Auto down 4.46%. Reuters “]  [/caption]

• Among the 30-member Sensex pack, 22 declined while only four of them managed gains. Auto stocks continued to be battered with Bajaj Auto down 4.46%, Hero Honda Motors down 2.32%, Hindalco Industries down 1.16%, and Jaiprakash Associates down 2.76%, edged lower from the Sensex pack.

• ONGC (up 1.49%), Hindustan Unilever (up 1.43%), and SBI up 0.89% edged higher from the Sensex pack.

• Index heavyweight Reliance Industries (RIL) was marginally up at Rs 948.6. Reportedly, the upstream regulator has asked RIL, the operator of the offshore KG-D6 field, to drill 11 more wells during the current financial year to reverse the decline in production of natural gas from the field.

• Performance of banking stocks is mixed with Union Bank falling the most by 4.70% and Canara Bank being the top performer in the pack gaining by 1.42%

• Asian stocks were trading lower on Wednesday on lower oil prices and fresh concerns about the European debt issues. The key benchmark indices in South Korea, China, Indonesia, Hong Kong, Singapore and Taiwan fell by between 0.38% and 1.61%. Tokyo markets are shut and will reopen on Friday.

• US markets closed mixed on Tuesday on concerns of lower earnings estimates and continuing fall in crude prices. The Dow Jones Industrial Average added 0.15 points to 12,807.51. The S&P 500 shed 4.60 points or 0.34% to 1,356.62 and the Nasdaq Composite index declined 22.46 points or 0.78% to 2,841.62.