Markets Volatile, RIL Down Ahead Of Results

As we expected in our morning update, the Indian equity markets have opened on a slippery note today. The benchmark BSE Sensex and Nifty are both down by 0.08% at this hour. The markets will remain volatile today after the overnight decline in the US markets. The European indices also closed in the negative, sending a wave of downbeat sentiment through the global indices.

The Asian indices, which remained volatile yesterday, have not shown any positive movement yet. The Hang Seng and Shanghai have slipped into the negatives, while the Japanese Nikkei is up by 0.6%. The Chinese markets have turned negative on fears of a slowdown in the world’s second-largest economy. The Chinese economy reported 8.1% growth in the first quarter of this year as compared to 8.9% in the corresponding period last year.

On the home turf, the markets have slipped over fears that the proposed GAAR would hit the foreign funds, mainly FIIs. According to government data, the trade deficit of the country has also widened to 56%, which could drag the rupee further down.

CD stocks have surged by 0.96%. This is due to the 1.8% surge in the Titan Industries scrip on expectations of better earnings in Q4 of the last fiscal. The Auto index is also up after the rate cut by the RBI and on news that the sector will report double-digit growth. Oil & Gas, on the other hand, is down by 0.47% as the index heavyweight, RIL, may report a drop in its earnings due to the fall in the gas production from its KG-D6 basis. The Power index is also down over the uncertainty in coal supply, as Coal India is yet to sign the required FSAs. Besides, a negative sentiment has been created over the order book of BHEL, as many low-cost Chinese companies are winning the Power Grid's transmission contracts.

Among individual stocks, M&M and Maruti Suzuki have surged by over 1% each. United Spirits has surged by 2.54% after it reported to the stock exchange that Sovereign Distilleries has become its fully-owned subsidiary. Strides Arcolab is further up after the company reported another product approval. Lupin is down by 0.63% despite resuming the production of Fortamet. In the Metals space, NMDC is up by 2.01% Kingfisher Airlines has also shot up by 1.57% after the news that Indian airlines will allowed to borrow through the ECB route.

The financial shares of IndusInd Bank are up by 0.42% after its results declared yesterday. The shares of Hindustan Zinc have surged by 0.75% as the company has declared a dividend of Rs 2.40 per share. KEC International has shot up by 2.65% after it secured orders worth Rs 1416 crore. Astra Microwave Products has also rallied by 7% after it reported winning Rs 310 crore worth of orders. ACC Cement and Ambuja Cements have declined due to lower profit in the Mar 2012 quarter.

Omkar Speciality, Claris Lifesciences, Flexituff International, Escorts, Container Corporation of India and Schneider Electric Infrastructure have all reported a good rise in their traded volumes. Umang Dairies, MRFB, Balkrishna Industries, Eicher Motors, etc. have reported new highs, while Birla Power, Tribhuvan Housing, Minolta Finance, etc. have reported new lows.

The market breadth, which indicates the overall health of the market, is positive.

Ahead today, Cairn India, FAG Bearings, Merck, State Bank of Bikaner, Mastek, etc. will report their Q4 numbers. RIL is also expected to report its quarterly results, and the stock is already down. We expect the markets to remain volatile today.