Markets Still Trading Lower

The Indian markets have continued moving southwards, extending some of their morning losses. Both the broader indices are trading lower by almost 0.60%. This might be on the back of speculations that the economy's current and fiscal account deficit may worsen with the falling rupee. Among the sectoral indices, Auto, Metals, Realty and Bankex are trading lower by more than 1% each, while IT, Teck and Healthcare are the only indices trading in the green zone.The other Asian markets are trading in a mixed bag, with Hang Seng trading lower and Shanghai is trading with marginal gains. The markets are looking nervous as the data on global jobs has disappointed. Further, the Chinese service industry signalled weaker economic growth. Nikkei market is closed for the day.

European markets have opened on a positive note today, with the CAC, DAX and FTSE trading higher in the range of 0.6%-1.2%. This is on the back of one of the largest French banks reported a higher profit than the street's expectations. The Euro zone markets have also opened higher on speculations that the Spanish bond auction will go through comfortably.

Back home, Hero MotoCorp is the leading index loser, down 7.17% to Rs 2084 after the company hiked its vehicles' prices and Morgan Stanley gave an underweight on the stock. Other Auto stocks like Bajaj Auto, Maruti Suzuki, Mahindra & Mahindra, etc. are also trading down in the range of 1%-2%. Coal India and ICICI Bank are also among the big market losers, down by more than 2% each. The Metals pack is trading weak, with stocks like Tata Steel, Jindal Steel and Hindalco all trading down by more than 1%.

On the other hand, IT stocks continue to shine on the back of speculations that their Jun 2012 quarter results could come better as the rupee is weakening. Wipro, Infosys and TCS are trading higher and supporting the broader market. HUL continues its gaining trend after its robust Mar 2012 quarter numbers. The stock is up by 1.41% to Rs 431. Others like HDFC Bank, BHEL and Sun Pharma are trading higher in the range of 0.7%-1.5%.

Marico is trading down 4% to Rs 173.05 on the back of speculations that it may not post good quarterly numbers. Shiv-Vani Oil and Gas Exploration Services is trading lower by 1.75% to Rs 162.05 despite winning an offshore drilling contract from GUPCO and completing the acquisition of an offshore jack up rig. Elecon Engineering is down 0.62% to Rs 55.75 despite bagging an order worth Rs 11.3 crore.

The market breadth, which indicates the overall health of the market, is weak. On the BSE, 1615 shares declined, 931 shares gained and 114 shares remained unchanged.

We expect the markets to remain volatile, and advise readers to play with caution.