Markets lose early gains over poll numbers

After opening on a weak note today, the Indian markets gained momentum within a few hours as the UP poll results were coming as per the markets' expectation, with expectations of an alliance between the SP and the Congress. However, with the final results available now, the situation seems to be in favour of the SP, and the hope of an alliance with the Congress will no longer come into picture. With the final numbers, the SP now has a majority of votes, though it is falling short of majority gains. It seems that this has come against the expectations, as the markets have pared all their morning gains. Both Sensex and Nifty are marginally up by 0.23% and 0.35% respectively.

Other Asian markets continued to trade on the negative note, as concerns over the slowing growth in China and the European debt crisis overshadowed the better-than-expected US economic numbers.

The European markets have continued their negative opening since the past two days. The FTSE is down by 0.30%, while DAX and CAC are down by 0.54% and 0.80% respectively. Renewed fears over the European recovery after the debt crisis hitting its growth and the slowdown in the Chinese growth for 2012 dented investor sentiment.

Among the Sensex shares, Coal India, DLF and SBI are leading with gains of 1.83%, 4.06% and 2.01% respectively. In the losers pack, Bharti Airtel, Cipla, Hindalco, ICICI Bank, RIL, Sterlite and Tata Motors are all trading down with losses between 1.18%-2.82%.

The market breadth, which indicates the overall health of the market, is Negative. On the BSE, 1295 shares fell and
1267 shares rose. 133 shares remained unchanged.

We expect the markets to remain flat and negative for the rest of the day, and advise readers to play with caution.