Markets Trading Lower, Nifty Still Below 5K

As expected in our morning update, the Indian markets opened in the negative territory in line with weak global cues. At present, both the indices are trading lower, with the Sensex down by 293 points at 16536 and Nifty down by 90 points to 4996. All the sectors are in the negative, with Bankex and Realty looking the worst, trading lower by more than 2.5% and dragging the market southwards. Others like Consumer Durables, Oil & Gas, Capital Goods, etc. are also trading down by more than 1.5% each.

The other Asian markets are also trading weak. The Nikkei is trading down 2.62% on global cues after remaining closed for a couple of days last week. Hang Seng is down 2.43%, while Shanghai is marginally in the red by 0.26%. The markets are looking weak on the back of dismal US job data and after the European elections results, which added to the uncertainty in the Euro zone. Investors are speculating that the developed economies like the US and those in the Euro zone will face several headwinds going ahead, resulting in muted growth for the world.

Back home, India's largest bank, State Bank of India, is the leading index loser, down 3.79% to Rs 1918. Others like ICICI Bank and HDFC Bank are trading lower by 2.7% and 2.25% respectively. Oil & Gas heavyweight, Reliance Industries, is also trading down by 2.86% at Rs 705.70. Other stocks like Tata Steel, Infosys, DLF, ITC, HUL, TCS, etc. are trading lower in the range of 1%-2%.

The gainers list is very short, and includes only four index stocks. Cipla is continuing its last week's gains, trading higher by 0.68% to Rs 327.40. Other stocks like BHEL, Sun Pharma, Bharti Airtel, etc. are trading marginally in the green zone.

Motherson Sumi Systems is trading down 2.27% at Rs 166 after its parent company Samvardhana Motherson withdrew its IPO on Friday, May 4, 2012, due to poor investor response. The IPO was subscribed only 0.23x. Oil marketing companies like BPCL, HPCL and IOC are trading higher in the range 1%-2%. This was after the crude oil prices saw some signs of cooling, currently trading at USD 112.49/barrel against last month's price of around USD 125/barrel.

The market breadth, which indicates the overall health of the market, is weak. On the BSE, 1477 shares declined and 667 shares rose. 75 shares remained unchanged.

We expect the market to remain volatile for the day, with a negative bias.