Markets Trading Down, Rupee At New Low

The markets have given up the gains recorded yesterday and have opened in the negatives. The benchmark BSE Sensex is trading lower by 1.19%, while Nifty is trading down 1.21%. All the sectoral indices are also reflecting selling pressure, with the Auto index taking the major beatings, down by over 2% at this hour. The rupee has given up another 31 paise against the dollar and is trading at 54.78 against the dollar. This is a new low recorded by the currency.

Among the world indices, the scenario is quite disappointing. Hang Seng has lost 2.3%, while Nikkei has lost 2.5%. The Shanghai market is also under pressure. Overnight, the US and European indices also ran into the red over the Euro zone crisis.

There was news that the Indian government is talking to one of the prominent rating agencies to get an upgrade. Yesterday, about sixteen banks in Spain were also downgraded by Moody’s. Banco Santander, the largest Euro zone bank, was also among them. This has further given the feeling that the government there is not able to the support the troubled lenders.

On the domestic front, the largest lender, SBI, is expected to post its Mar 2012 quarter earnings today. The street expects SBI to report a profit of Rs 3580 crore in the quarter under review as against Rs 21 crore in the corresponding period last fiscal. Its NIM is expected to grow by 46% to Rs 11777 crore.

From the Sensex stocks, only SBI, HUL and Cipla are trading in gains and the rest are in the red. The financial shares of Tata Motors have nosedived further by over 3%. The stocks of Infosys are also witnessing selling pressure. Yesterday, Infosys wrote to its clients that its business is on the right track. The company also said that the guidance by Nasscom is far too ambitious. The shares, however, have taken a beating following the weak guidance in the Q4 results. Bajaj Auto, Maruti Suzuki and Jindal Steel are trading lower by more than 2% each.

In individual shares, Indiabulls Real Estate is down nearly 5%. IRB Infra and Voltas have also tanked over 3.5%. The shares of AstraZeneca have risen by a further 6% today. Yesterday, the company's shares rose by 20%. NMDC and Pantaloon Tetail are also trading in gains of over 1%.

Investors have not responded to the IPO of Specialty Restaurants that is currently open. The subscription is below 1%, and today is the last day of the offer. This has suggested that the investors may remain bearish on the primary market until the valuation of the IPOs become attractive. This may be the third IPO to get hit by the investors’ negative sentiment.