Sensex, Nifty drop in early trade; BF Utilities surges 20%, banks shine

Domestic stock indices opened on a muted note on Tuesday, in line with weakness in Asian markets. The losses were, however, capped.  Investors were cautious ahead of the release of minutes of the recent US Federal Reserve policy review later this week.

At 9.20 am, the 30-share pack BSE Sensex was down 117 points, or 0.19 per cent, to 61,051.05. The NSE barometer Nifty50 edged 30 points, or 0.16 per cent, lower at 18,167.80.

Among broader indices, the BSE Midcap index and the BSE Smallcap index rose 0.3 per cent each. India VIX, the fear gauge, advanced 2 per cent to 14.87-level.

Concerns over global economic slowdown is weighing on domestic stocks. A data on Chinese PMI for December came in at 47, which indicates sharp deceleration in the Chinese economy. It reinforces the global slowdown theme, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services

"Though this is a near-term negative for global equity markets, India is likely to shrug off this negative news since India’s economic outperformance is expected to continue," he added. "Corrections in the market caused by FII selling and bear hammering may be used to slowly accumulate high quality stocks."

In terms of sectors, FMCG, metal and auto stocks led the losers while buying was seen in banking, financial and realty counters.

Among Nifty50 constituents, SBI Life, Sun Pharma, Reliance Industries and Hindustan Unilever lost 1 per cent each. Axis Bank and Tata Motors topped the Nifty50 gainers.

BF Investment hit an upper circuit of 20 per cent after delisting buzz while South Indian Bank jumped about 10 per cent following the quarterly updates. Jindal Stainless and M&M Finance led the losers with up to 4 per cent cuts.

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