Markets open flat, ONGC slips over 2%

Markets opened on a subdued note due to lack of any strong trigger and weak global cues. The S&P CNX Nifty was up 2 points, at 5,501 and the Sensex was up 23 points, at 18,365.

Foreign Institutional Investors have turned Jittery as they have been net sellers of $1.6 billion (Rs 7220 crore) since March 25 according to the Bombay Stock Exchnage due to high inflation and hawkish stance of the central Bank. Technical analysts expect further downside for the markets as the Nifty has formed a bear flag pattern on technical charts resembling an inverted flag on a pole, the decline has strong volume and consistent downward price movement.

Edelweiss in the morning note said, “The bear flag continuation pattern is still in play as we look for an eventual break down of last week’s range trade. The momentum oscillators have again rolled bearish.” Edelweiss expects markets to take support at 5370-5350 levels.

Across Asia, markets were trading mostly lower amid signs of a slowdown in the United States which dragged the global stocks and oil prices lower.

Japan's benchmark Nikkei average was down 0.4% over concerns of compensation pay out at the nuclear power plant and losses in auto shares. Hong Kong's Hang Seng fell 0.4% led by losses in resource shares. China's Shanghai Composite index slipped 0.2%.

Among individual stocks ONGC fell 4% on concerns that upstream oil companies may have to bear the subsidy burden of Rs 30,000 crore according to television reports as government increased upstream subsidy sharing to to 38.5% of total burden for FY11 which may affect the profitability and plans of Follow on public offer. Also State Bank of India was on investors’ radar ahead of quarterly results, according to Reuters poll profit is expected to rise 63% y-o-y.