Markets - Volatility remains at the forefront

Volatility remains at the forefront in the market. Key benchmark indices trimmed losses after slipping into the red once again, to hit fresh intraday lows in the early afternoon trade. The NSE benchmark, Nifty, has been moving in a narrow range of 5270-5300 since the morning trade, without giving any clear indication for the day. 

Meanwhile, European markets have opened on a positive note, as the Italian Prime Minister, Silvio Berlusconi, decided to resign after the Parliament approves austerity measures. Other Asian indices are also seen trading on a firm note on the back of a cooldown in Chinese inflation. However, these positive developments do not seem to be having any effect on our domestic indices.

Back home, the country's largest lender, SBI, fell sharply post the second quarter numbers announcement. SBI plunged 4.6% on the back of worries over its asset quality. The bank has reported a better-than-expected increase of 12.34% YoY in Net Profits of Rs 2810 cr for Q2 FY12, and the Net Interest Income jumped 28.43% to Rs 10422 cr during the same period. However, its gross non-performing assets increased to 4.19% in the July-September quarter of FY12 versus 3.35% in the same period a year ago.

Other banking stocks were also seen in the red zone, following Moody’s downgrade of India’s banking sector outlook from stable to negative.

L&T, ONGC, BHEL, M&M, Maruti, NTPC, Sun Pharma and Sterlite were down by 0.5-1%. However, FMCG stocks provided good support. HUL was the biggest gainer, rising 3.3%, and ITC gained 1%. TCS, Bharti Airtel, Hero MotoCorp and Wipro rallied 1-2%, while HDFC rose 0.5%.

The market breadth, which indicates the overall health of the market, is negative. On the BSE, 1534 shares fell and 1153 shares rose. A total of 8 shares remained unchanged.

In conclusion, the markets are expected to remain volatile for the rest of the day, as investors are awaiting the IIP and inflation numbers, which are expected shortly.