Sensex grinds lower as Asia plunges

The market slipped into the red following weak Asian cues. Investors resorted to profit booking after yesterday's gains. The 30-share BSE Sensex was trading at 16,715, down 126 points and the 50-share NSE Nifty was lying 40 points lower at 5,016.

Among Asian markets, Kospi tanked 3% and Taiwan plunged 2%. Nikkei lost over 1%. Shanghai was down 0.4%.

Shares of major banking stocks continued to see a sell-off as it seemed that investors may be offloading exposure. ICICI Bank tumbled 3.5%. SBI, Kotak Mahindra Bank, PNB and Axis Bank were down 1.5-3%. IDFC too fell 3% and HDFC declined 0.5%.

In the auto space, Tata Motors too remained on sellers' radar by falling over 2%. M&M and Maruti Suzuki fell 0.8-1.5%. These stocks have been falling since yesterday.

India gold extends gains to near peak

India gold extended gains on Wednesday afternoon to near its peak following firm overseas markets, and a weaker rupee, which made the dollar-quoted yellow metal expensive, analysts said.

* The most-active gold for October delivery on the Multi Commodity Exchange (MCX) was trading 0.64% higher at Rs 26,392 per 10 grams at 1: 47 pm, after nearing its previous record at Rs 26,400.

* The contract had struck its peak at Rs 26,457 last week

* Global gold held steady near a record high after a Franco-German summit failed to convince investors that the euro zone debt crisis would be solved effectively, supporting safe-haven demand for bullion.

Get the latest gold prices here http://www.moneycontrol.com/commodity/

* The rupee, which was weaker on euro's retreat and oil demand, plays an important role in determining the landed cost of the dollar-quoted yellow metal.

* Physical buying stayed weak as prices neared peak.

* "Buying is not very encouraging. Indian buyers are still at sidelines," said a dealer with a private bank in Mumbai, which imports bullion.

* Gold demand from India, the world's biggest buyer of the yellow metal, will gain pace in coming weeks on the back of wedding and festival demand.

Nifty above 5050

The NSE Nifty was trading with marginal gains in late trade. IT and FMCG stocks were trading in  thepositive terrain. However, heavy selling was seen in realty, auto and banking stocks.

Stocks like Reliance, ICICI Bank, SBI, DLF and Axis Bank were laggard in the bourses.

The Sensex was up 65.90 points or 0.39% at 16796.84, and the Nifty up was 9.30 points or 0.18% at 5045.10. About 797 shares have advanced, 1957 shares declined, and 917 shares remain unchanged.

Top losers on the Sensex were DLF at Rs 177.65 (down 6.01%), Maruti Suzuki at Rs 1,183.20 (down 3.46%), Tata Motors at Rs 776 (down 3.21%), ICICI Bank at Rs 909.80 (down 2.71%) and M&M at Rs 717 (down 2.09%).

Meanwhile, top gainers on the Sensex were TCS at Rs 1,000 up 2.66%, Coal India at Rs 397.75 up 2.62%, Sun Pharma at Rs 484 up 2.08%, Infosys at Rs 2,442.05 up 2.06% and HDFC at Rs 659.45 up 2%.

Cigarette major ITC was trading at Rs 203.40 up 1.7% from its previous close of Rs 200.

Rupee largely steady

The rupee was largely steady in early morning trades on Wednesday in the absence of any major cues, and traders will watch local stock and the euro for more cues.

* At 9:40 am, the partially convertible rupee was at 45.3900/45.3925 per dollar, compared with 45.38/39 per dollar at Tuesday's close.

* Traders expect the rupee to trade in a narrow range of 45.30-45.45 intraday.

* The BSE Sensex rose 0.8% in early trade on Wednesday on bargain hunting by institutional investors after a three-day slide, but the overall mood was cautious amid lingering worries about the health of the global economy.

Go for gold, copper, crude to strengthen portfolio

By: Moneycontrol

Investors have been turning to commodities during this phase of global market volatility. Here are experts’ top picks for the day.

Gold:According to Naveen Mathur, Associate Director, Commodities & Currencies, Angel Broking, the commodity strategy for the day would be to buy the MCX October contract of gold in the range of Rs 26,100-26,110 per 10 gm. The stop loss recommended is Rs 25,950 per 10 gm and target is in the range of Rs 26,380-26,400 per 10 gm levels.

With the way the eurozone problems continue, there could be another round of safe haven buying in gold. Therefore, T Gnanasekar, director of Comm Trendz Research & Fund Management recommends buying during dips to Rs 26,100 per 10 gm, with a stop loss of Rs 25,970 per 10 gm and a target of Rs 26,450 per 10 gm.

Copper:Ashish Shah of Sushil Global Commodities believes that copper will continue to remain under technical selling pressure and that it will lack any fundamental buying triggers. Therefore, he expects the metal to remain in the range of Rs 405 per kg on the higher side and Rs 385-387 per kg on the lower side. He recommends selling that counter for a lower target of Rs 395-390 per kg, with an overall stop loss of Rs 405-407 per kg.

Crude:According to NS Ramaswamy, head of commodities at Ventura Securities, the MCX August crude contract continues to remain a buy counter.  He recommends going long at the levels Rs 3,900-3,905 per barrel, expecting a target of Rs 3,980-4,050 per barrel. This could be played with a stop loss of Rs 3,845 per barrel.