Markets trading in a narrow range

As mentioned in our morning update, the Indian markets opened sideways today. At present, both the indices are trading in a very narrow range, with the Sensex up 36 points at 16502 and Nifty up 6 points at 4973. Among the sectors, Oil & Gas and Power are trading higher by 2.88% and 1.36% respectively, while IT, Teck, Bankex are trading in the red zone.

Other Asian markets are trading in a mixed bag. The Nikkei up 1.41% while the Hang Seng is marginally up by 0.30%. Shanghai is trading in the red, down 0.33% after rallying by more than 4% yesterday.

Back home, index heavyweight, Reliance, is trading 4.19% higher at Rs 771.35 on the back of the board's announcement that it will consider the buyback of shares. Maruti Suzuki continued yesterday’s rally, and is up 1.92% to Rs 1131.30 after the company decided to hike its product prices. Others like HDFC Bank, Bharti Airtel, Hero MotoCorp, Tata Power, Coal India, etc. are trading higher by more than 1.50% each.

On the other hand, IT stocks are trading in the red zone. TCS and Wipro are trading down by 3.47% and 2.35% respectively. TCS came out with its Q3 FY12 numbers after market hours yesterday. Its consolidated Net Profits increased by 22% to Rs 2803 cr, while the revenues grew by 13.5% to Rs 13204 cr on a sequential basis. Stocks like ITC, HUL, HDFC, Sterlite Industries, Tata Motors, etc. are trading marginally in the red zone.

Essar Oil continued its losses from yesterday (8%). As of now, the stock is trading down 12% to Rs 51.05 after the news that the company has to pay Rs 6300 cr in taxes. One should watch for the Power stocks, as the sector heads have an important meeting scheduled with the Prime Minister and other ministers today.

Other stocks that are going to announce their Q3FY12 numbers today include Raymonds, Jindal Steel, Bajaj Finserv, Tata Coffee, etc. These stocks could be volatile on the back of their numbers and the management guidance.

The market breadth, which indicates the overall health of the market, is very strong. On the BSE, 1215 shares rose and 785 shares declined. 79 shares remained unchanged.

We expect the markets to remain volatile for the day.