Markets Open Flat, TCS Up 10%

The markets have opened flat today. While most of the stocks in the key indices have fallen, key support is coming from IT major, TCS, after its robust results as well as better guidence for the next fiscal. In the meantime, Bharti Airtel has fallen by over 5% after TRAI has set the base price for the 2G spectrums 10 times higher than the 2008 prices. This has caused a stir in the telecom stocks, and most of them are trading in the negatives.

Overnight, the European stocks traded in the red as the PMI numbers in Germany declined to a 3-year low. The US stocks also ended the day in the red after reports indicated that Walmart had paid bribes to acquire stores in Mexico. On these negative cues, all key Asian indices are trading in the red. The Shanghai market has fallen by 1.4%.

From the Sensex stocks, Wipro is trading up by 1.72% mainly after the positive results posted by HCL and TCS. Tata Power is also up by 1.72%. The positive numbers of TCS indicate that Infosys is facing hurdles in its business, and hence the latter has lost 2.47%. DLF has gone further down by 1.08%.

On the sectoral front, the IT index is up by 0.71% following the positive sentiment created by TCS. CD stocks are also trading up over better results expectations from Titan Indusries. The BSE Power and PSU indices are also trading up at this hour. On the other hand, the CG index is trading with loss of 1.10%. All the other indices are also trading down.     

Among individual stocks, TCS is trading up by 10% after crossing USD 10 billion in revenues for FY12. The company reported a full year profit of Rs 10638 crore, which is 22% higher than that in the last fiscal. As per the management, the outlook for the company remains robust, and we believe that the stock will remain positive in this week. HCL Tech is also trading up on its growth prospects.

Rupee depreciation has dragged stocks such as Tata Power, Lanco Infra, Jindal Steel, etc. Ambuja Cements is still trading in the red after its results declaration in the last week.

Britannia Industries has shown a rise in volumes. Overall, companies like TCS, Infosys, SBI, Britannia Industries, Titan Industries, L&T, Axis Bank, etc. have reported a good rise in their turnover.

Asian Paints continues to trade with new highs. The troubled carrier, Kingfisher, is trading at an all-time low of Rs 14. Similarly, Cox and Kings is trading at a new low.

The market breadth, which indicates the overall health of the market, is negative as more stocks have declined.

Ahead today, companies like AP Paper, Blue Dart, ING Vysya, Sesa Goa, Petronet LNG will report their Mar 2012 quarter numbers. Investors would do well to listen to the management commentary for better guidance.

We expect the markets to remain volatile with a positive bias.