Nifty breaks below 8400; metals, oil & gas lead fall

2:30 pm: "This is clearly a profit booking downmove rather than led by fresh short selling," says Anuj Singhal on CNBC-TV18. "Shares such as Andhra Bank, Apollo Tyres, TVS Motor and Reliance Comm, all of which have rallied hard recently are all down significantly today."

Singhal said that the 8,400 level on the Nifty was a crucial technical level and failure by bulls to hold it would those on the short side a stronger hand leading up to expiry.

Small and midcaps, too, have witnessed profit booking, with a 0.77 percent and 0.64 percent cut for the respective indexes.

Not surprisingly, the list of counters in which there are only sellers has ballooned over the past hour , with a number of small stocks featuring there.

The advance-decline ratio stands at 1163:1798 for BSE traded shares.

2:00 pm: After ambling about around the flat line for most part of the day, indexes broke decisively on the downside in late trade.

At the time of this writing, the BSE Sensex was down 0.43 percent, or 123 points, to 28,049 while the NSE Nifty was off 0.5 percent, or 40.75 points, to 8,385.

Oil & gas shares were down the most led by heavyweights Reliance Industries and ONGC falling 0.7 percent and 1.4 percent, respectively.

Metal stocks, too, were down led by Coal India (down 1.7 percent), even as the government is expected to come out with draft rules that will lay out a roadmap for auction of cancelled coal mines.

Telecom shares, barring Bharti Airtel, too surrendered early gains, amid news the government had decided to split spectrum auctions to be conducted early next year into two stages.

By and large, only consumer stocks were still holding up, with Britannia up 2.4 percent, Nestle rising 0.4 percent while ITC traded up 0.5 percent. Such stocks, analysts said, are expected to benefit going forward from the global fall in commodity prices as well as with the government efforts to roll out the goods and services tax gathering pace.

1:30 pm: In other asset classes:

• The rupee was down against the US dollar to 61.85, some distance short of a nine-month low of 61.90.
• Crude oil traded at USD 78.5 a barrel, continuing their recent softness amid reports of a rising gap between supply and demand.
• The 10-year Gsec yield fell 67 points to 8.16 percent.

1:00 pm: The flat trend continues with benchmark indexes wandering close to the dotted line.

At the time of this writing, the BSE Sensex is up 0.02 percent, or 7 points to 28,170 while the NSE Nifty is down 0.04 percent, or 4 points, to 8,422.

Action in the consumer space has heated up, though, with both durable and non-durable stocks outperforming the benchmarks, amid hopes falling input prices and quicker implementation of the goods and services tax would boost profit margins for such companies.

Consumer stocks have lagged the more high-beta stocks in the recent rally.

HUL and Dabur India are up 1.5 percent higher, while Blue Star and Whirlpool have gained 0.7 percent each. ITC has gained 0.9 percent.

Among frontliners, Hindalco and Dabur are up 2.3 percent apiece while Sun Pharma, Cairn and Cipla are leading the losers' list with a 1.9 percent loss for each.

Sugar stocks have given back some of their gains, with Balrampur Chini slipping into the red. They were up this morning amid hopes the government was going to announce sugar export sops today but no announcement has been forthcoming so far.

UB Engineering is up 4.8 percent, ahead of its results declaration.

12:30 pm: The staidness continues in the market but it is naturally not lacking in individual action.

Hindalco was up 3 percent after a note by Goldman Sachs, which initiated coverage on the stock, laid out a price target of Rs 215 (making out 35 percent potential upside), saying it is positive on its Novellis acquisition.

Info Edge surged 2.23 percent after it upped its stake in fast-growing restaurants listing website Zomato through a Rs 185 crore infusion.

While Shakti Pumps was up 9.6 percent after asset manager Franklin Templeton was reported buying in the counter.

12:00 pm: Frontline shares are largely listless in afternoon Mumbai trading as investors and traders appear to have paused for breath over the past two days after a ferocious rally in the past few weeks that saw the Nifty and Sensex make fresh all-time highs several times.

As of this writing, the BSE Sensex is up 0.08 percent, or 22 points, to 28,185 while NSE Nifty is up 0.02 percent, or 1.9 points, to 8,427.

For traders, though, the advice would continue to be to on the long side, according to Sudarshan Sukhani of s2analytics.com, who advised that stop losses should be raised higher (Sukhani advises 8,400 on the Nifty).

Among bluechips, Hindalco, DLF and BPCL are up 1.7 percent to 3 percent while Sun Pharma, M&M and Cipla have lost 1.2 percent to 1.7 percent.

Consumer stocks are providing support to the markets while oil & gas and IT shares are pressuring the index.

Consumer stocks, which are looking expensive on absolute valuation basis, must be looked at given the fact that they are expected to benefit from the global fall in commodity prices, says Dipen Sheth of HDFC Securities.

In an interview with CNBC-TV18, Sheth outlines stocks he believes are likely to gain over the next 12 months.

Shares in logistics companies have witnessed profit taking after a power-packed rally that has seen several stocks rise manifold over the past one year.

Mid and small cap shares have risen 0.74 percent and 0.83 percent.

11:30 am: Meanwhile, a good part of the recent FII-fueled rally has been driven by participatory notes, the controversial derivative instrument that allow foreign investors to anonymously invest in the Indian market, and which critics accuse of being used for the purpose of laundering Indian black money.

In fact, investments into domestic shares through participatory notes (P-Notes) surged to the highest level in more than six-and-half years at Rs 2.65 lakh crore (about USD 43 billion) in October.

So here's Moneycontrol.com editor Santosh Nair who says it may be time for the government to look to start phasing out p-notes from the Indian market.

11:00 am: Day 2 of consolidation continues with the benchmark indices trading in a small range below and above the flat line.

The BSE Sensex is up 0.09 percent, or 24 points, to 28,188 while the NSE Nifty is up 0.04 percent, or a mere 4 points, to 8,429.

The broader markets are still going strong, as traders continue to cash in on opportunities provided by riskier mid and small cap fare.

In sectors, sugar, telecom and auto are higher while banks, IT and oil & gas are down. The move in sugar and telecom was led by respective news in those (likely sugar export subsidy and dates announcement of upcoming spectrum auctions).

Among individual stocks, Infosys is down 0.5 percent after the sacking and resignation of its BPO unit CFO and CEO, respectively. Aurobindo Pharma had lost 1.1 percent after a director had been attacked this morning in a foiled kidnap bid. Ranbaxy fell 1.9 percent after exchanges announced dropping the stock from key indexes owing to its proposed merger with Sun and after it filed a suit against the US FDA for revoking a drug approval.

Mid and small caps were up 0.74 percent each, following up yet another day of gains. But experts are now turning cautious on valuations in the space.

''We are now struggling for the last couple of months because top down most of the stocks we have been covering for a while have become just too rich for our comfort and we have been on a downgrading spree in fact,'' Gautam Chhaochhari of UBS told CNBC-TV18.

''The names where we still have a conviction on is MCX, then LIC Housing Finance, Exide Industries where we still think the risk reward is still attractive in terms of positive surprise and current valuations,'' he added.

10: 30 am: Meanwhile, the market has given back all its gains and has slipped mildly into the red.

As of this writing, the Sensex is down 0.1 percent to 28,136 while the Nifty is off 0.15 percent to 8,413.

10:00 am: The frontline market has given back a major part of its opening gains, even as, predictably, the action continues in the broader market.

The BSE Sensex was up 0.08 percent, or 21 points, to 28,188 while the NSE Nifty had gained 0.04 percent, or 3 points, to 8,429.

Overall, sugar and consumer durables have risen the most with 1.94 percent and 1.44 percent gains, respectively, followed by metals, autos, capital goods and chemicals, all up about 0.5 percent.

While banks, oil & gas, IT and pharma were mildly down to flat in trade.

Among the frontliners, Hindalco, BPCL, Tata Power and JSPL are up the most, with a 1.6 percent to 2.7 percent rises while Sun Pharma, GAIL, Cairn and Tata Motors were among the decliners, with a 0.9 percent to 1.1 percent loss.

In news-driven stocks, Aurobindo Pharma is down 1.6 percent, after there were reports its chairman had been shot at this morning by unidentified attackers in Hyderabad.

In other news, RBI governor Raghuram Rajan has said that the central bank was committed to focusing on creating ''sustainable growth'' for the economy, perhaps hinting that a rate cut is not on at the December monetary policy meeting - despite pressures from everyone Arun Jaitley down. The RBI chief has gone on record several times in the past stating that inflation must be brought under firm control in order to create ''sustainable growth''.

And for traders who are bored with not much action happening in the market, here's quick read on how greed, fear and intertia drive stocks . The analysis comes from former Federal Reserve chief Alan Greenspan.

9:15 am: Indian shares opened steadily higher, as bulls appeared to be buying shares with renewed vigour after a day's consolidation.

The BSE Sensex was up 0.30 percent, or 74 points, to 28,237 while the NSE Nifty opened 0.17 percent, or 14 points, higher to 8,442.

Sugar stocks were in focus early amid hopes the government would announce export sops. Sector leaders Balrampur Chini, Shree Renuka and Bajaj Hindusthan were up between 1.54 percent and 3.88 percent.

In individual stocks, SBI hit a 52-week high, rising 0.5 percent to Rs 2,960.

While in news-driven stocks, Infosys was down 0.8 percent after the CFO of its BPO unit was asked to leave after discovery of misconduct, and the CEO resigned soon after.

Telecom stocks were trading marginally lower, with Bharti Airtel, Reliance Communications and Tata Tele were down 0.2 percent to 0.4 percent after the Department of Telecom announced it would split the upcoming spectrum auction into two stages: in February and around May next year.

Ranbaxy was down 0.6 percent after it filed a suit against the US FDA for revoking approval for a couple of its drugs, even as exchanges announced the stock would be dropped from key exchanges following its proposed merger with Sun.

As has been the script since a few days, the action has been in broader market with mid and small caps rising 0.54 percent and 0.65 percent, on average.

However, some experts have expressed caution over the move in mid and small caps, which have rallied about 52 percent and 90 percent, respectively, over the past one year.

''The party is going on but I am worried about valuations in some of these stocks,'' CNBC-TV18's Anuj Singhal said in his market analysis. ''You have to realize that when the party stops, you don't want to be the last man standing.''