ET

Mumbai, Dec 12: Equities were under pressure as sentiments turned negative after the US senate declined to pass $14 billion package to bail out its auto industry.

Senate Majority Leader Harry Reid said he was “terribly disappointed” about the demise of an emerging bipartisan deal to rescue Detroit's Big Three automakers. He spoke shortly after Republicans left a closed-door meeting where they balked at giving the automakers federal aid unless their powerful union agreed to slash wages next year to bring them into line with those of Japanese carmakers.

“The markets are likely to edge lower in the morning trade as some profit taking could creep-in as the package for the US Auto companies is still hanging fire in the Senate. The slide in the dollar, however, will keep the embers hot for the commodities, though the related stocks may see some profit booking,” said Anagram Stock Broking note.

Benchmarks were facing a stiff resistance at lower levels. At 10:30 am, National Stock Exchange’s Nifty was at 2839.75, down 2.75 per cent or 80.40 points. The broader index fell short of breaching support of 2800. It touched an intra-day low of 2812.55 and a high of 2917.95.

Bombay Stock Exchange’s Sensex was at 9372.87, down 272.59 points or 2.83 per cent. The 30-share index touched an intra-day low of 9281.89 and a high of 9394.78.

Trend deciding level for the day is 9611/2909 (Sensex/Nifty). If Nifty trades above these levels during the first half-an-hour of trade then we may witness a further rally upto 9780 – 9915/2956 - 2993. However, if market trades below 9611/2909 for the first half-an-hour of trade then it may correct up to 9476/2873,” said Angel Broking note.

Midcap and smallcap stocks showed some resilience. BSE Midcap Index was down 0.89 per cent and BSE Smallcap Index declined 0.29 per cent.

All the sectoral indices were in the red. BSE Metal Index fell 3.49 per cent, BSE Realty Index tripped 3.44 per cent and BSE Auto Index moved 3.24 per cent lower.

The markets are likely to watch with keen interest the reading of the Index of Industrial Production. “The street expects a reading of 2 per cent growth for the month of October. A lower growth would be disappointing. But going by the fact that the markets are showing very strong resilience, there could be a scenario, in which the markets may initially fall and then bounce back with a vengeance,” the note added.

Jaiprakash Associates (-5.02%), Tata Motors (-4.92%), DLF (-4.68%), Mahindra & Mahindra (-4.38%) and Tata Steel (-4.34%) were the top Sensex losers.

Market breadth was negative on the BSE with 833 declines and 620 advances.