Markets Give Up Morning Gains

The Indian markets gave up their morning gains, as investors are speculating that India Inc. may post a muted-to-subdued performance in the March quarter of FY12. This was after Infosys' dismal results and weak management outlook. Among the sectors, IT and Teck are trading lower by 5.2% and 7.01% respectively. On the other hand, the Auto, Healthcare and Oil & Gas indices are trading higher by more than 1.5%.

Other Asian markets are trading higher, with Hang Seng and Shanghai higher by more than 1%, while Nikkei is trading marginally in the green zone. The markets gained on the back of speculations that the Chinese government may take actions that could fuel growth in the economy further.

The European markets opened the day in the red zone, with the 3 major indices, CAC, DAX and FTSE, trading down between 0.14%-0.45%. This was on the back of speculations that the European Central Bank will restart the bond purchases on concerns that the sovereign debt crisis will worsen further.

Back home, Coal India is the leading index gainer, up 2.57% to Rs 341.25. The Auto stocks continued trading higher, with Hero MotoCorp, Maruti Suzuki and Tata Motors trading higher in the range of 1.56%-2.35%. FMCG players are continuing their rally, with HUL and ITC trading 1.40% and 0.45% respectively. Other stocks like DLF, HDFC, ONGC, Cipla, etc. are trading marginally in the green zone.

On the other hand, the IT stocks are trading lower, taking off some of the market's gains. Infosys is among the leading index losers, down 10.32% to Rs 2466 after the company posted disappointing March 2012 quarter results. It reported a Net Profit of Rs 2316 crore for the quarter, which is 27% higher on a YoY basis but down 2.4% on a QoQ basis. Further, the company's guidance for FY13 was below the market expectations. As per the management, revenues are expected to grow at around 8% in FY13, as against the street expectations of 12%-14%. TCS and Wipro are also trading lower by 5.34% and 4.82% respectively on the back of speculations that they may also show a weak performance in their March quarter results and give a muted growth outlook.

The market breadth, which indicates the overall health of the market, is weak. On the BSE, 1336 shares, gained 1313 shares declined and 147 shares remained unchanged.

We expect the markets to remain volatile with a negative bias for the rest of the day, and advise readers to play with caution.