Markets Flat, TCS Results Eyed

As expected in our pre-opening update, the Indian equity markets have opened flat. Tracking the better than expected results posted by HCL Tech last week, investors will keenly watch out for the March quarter numbers of TCS to be announced today. Meanwhile the scrip has beaten the broader index and is up by 0.87%. The Indian equity indices are trading up by 0.15% at this time but the intraday outlook remains volatile.

On the global front, the Asian indices are sending negative signals to the markets. All key indices are trading in red at this time. Hang Seng, Shanghai and Nikkei are trading with losses. Other global markets in US and European closed with marginal gains. 

Last week RBI surprised everyone on the streets with a higher than expected 50 basis points interest rate cut. Markets however did not rally hence we believe that it has discounted the rate cut. With the earnings season started markets would be looking for the stock and sector specific triggers.

At this moment CG stocks are on the buyer’s radar. The CG index is up 0.62% which has been supported by L&T which is up 0.77%. Recently company has commissioned the solar power project in Gujarat. Similarly CD stocks are also trading marginally up. Titan Industries, the largest stock in the CD index is up by 0.69%. After the rate cuts, interest rate sensitive Bankex and Auto are trading up. After the positive results by HCL, Infosys’s guidance looks quite weak. This has dragged down the IT index by 0.43%.

The scrip of Reliance industries after reporting its March quarter results is up 1%. The company reported lower EBITDA margins however the GRMs were up to USD 7.6/barrel versus USD 6.8/barrel on sequential basis. Company has also said that it will not plan any Capex until gas price rise to the market price. The net profit for the March quarter was down 4.6% (qoq).

Cairn India, E&P Company also reported its March quarter results where company posted 11% decline in net profit mainly due to the Forex loss (Rs 217 crore). The scrip is trading flat at this moment.

Persistent Systems reported 24.4% rise in its net profit. Its total income was up 27%, the stock however is trading in volatility. IDBI bank is up 2% after good set of numbers in March quarter. Suzlon energy has bagged an order worth USD 287 million, the scrip is trading in green.

Among the individual stocks Tata steel is up 1.46%. Coal India is up 0.84% after its declaration that E auction coal will be available at the current level and the penalty for not meeting the target would be as low as negligible. Strides Arcolab is also up 2.6% after it received a drug approval on Friday.

Ahead today Alstom Projects, Coromandel International and Ultratech cement will announce their quarterly performance and investors can take guidance from the quarterly business performance.

Volumes have increased in Hexaware, VST industries, AP Paper, RIL, Cairn India and Schneider Electric. New highs are seen in Umang Dairies, MRF, Asian Paints, Munjal Auto, TTK Prestige etc.

Overall market breadth indicating the health of the market is positive. Total 1369 stocks have advanced while 777 have declined while 105 have remained unchanged.

Ahead today markets will remain volatile with positive bias.