Markets Trading Lower

The Indian markets are trading lower, with the broader indices down by more than 0.5%. This downward move occurred after almost 4% gains seen in the recent trading sessions. The market seems to be in a consolidated phase or could move further downwards as investors may book some profits. IT is the major loser among the sectoral indices, down by more than 1%, while others like Auto, Teck and Bankex are also trading lower. Capital Goods, Realty and Power are trading in the green zone.

Other Asian markets are trading weak, with Hang Seng, Nikkei and Shanghai trading down in the range of 0.5%-2%. One of the crucial reasons for the Asian markets trading lower today is the widening of the Japanese trade deficit by 12.6% on a YoY basis.

The European markets have also opened on a negative note. The FTSE, CAC and DAX are trading lower in the range of 0.72%-1.25%. Media reports stated that investors were disappointed on the Fed’s silence on the 3rd round of QE and on the rating agency Fitch's downgrade of Spain.

Back home, ONGC is biggest index loser, trading lower by 2.19% at Rs 257.10. Other stocks like Maruti, Infosys, Jindal Steel, Bajaj Auto, etc. are trading down by over 1%. Banking stocks like ICICI Bank, HDFC Bank and SBI are trading lower in the range of 0.57%-1.24%. Tata Steel, Hindalco and Coal India are trading marginally in the red zone.

On the other hand, Sterlite Industries witnessed profit booking. The stock is the highest index loser, down 3% to Rs 100. Other stocks like GAIL India, HUL, Airtel, BHEL, RIL, etc. are trading marginally in losses.

Fame India is trading 3.97% higher at Rs 49.75 after media reports that the multiplex chain and 3 of its subsidiaries are set to merge with parent firm, INOX Leisure. The company’s board is expected to clear the deal in its next meeting slated for June 15. After the merger, Fame is likely be rebranded as INOX, said an individual familiar with the matter (on condition of anonymity). The merger will create the country’s largest multiplex chain with 257 screens.

The market breadth, which indicates the overall health of the market, is weak. On the BSE, 1342 shares declined, 1140 shares gained and 106 shares remained unchanged.

We expect the markets to remain volatile with a negative bias today.