Markets Flat, Keenly Awaiting Inflation Data

The markets have opened trades flat with a negative bias. The Sensex and Nifty are both trading in a highly volatile manner. The markets are keenly looking out for the inflation data, and we expect some action only after that.

The peer Asian indices are also reflecting negative trades.Nikkei is currently in flat to negative trades, Hang Seng has lost by 0.5% and Shanghai has lost 0.33%. The indices are under pressure as the European woes have hit the markets.

Meanwhile, investment bank UBS has said that the 25 bps cut in repo rates is least important, as the global events are more important to the markets.

Amid this high volatility, gold has regained its sheen and has become dearer by Rs 87. The metal is currently is trading at Rs 30123 per 10 grams.

Of the sectoral indices, FMCG and IT are seen trading with about 0.3% gains. Teck, Metals, Oil & Gas and Auto are almost flat in trades. All the other indices are in negatives. Bankex and CG have lost over 1% at this time.

Among the Sensex stocks, Sterlite Industries and ITC have gained over 1% each. Maruti Suzuki has gained 0.74% after yesterday’s negatives. M&M, Infosys, HUL and Tata Steel are also in the positives. The shares of L&T are down by 2.29%, showing a delayed impact of the IIP figure degrowth in the Capital Goods index by 16%. NTPC is also down by nearly 2%, as it has slashed some its target capacity due to fuel shortages. The shares of SBI and ICICI Bank are also seen trading down.

Fertilisers stocks are seen gaining the positive momentum ahead of the meeting by CCEA meet to discuss a proposal to hike urea price.

The shares of MosarBaer have gained on the proposal of restructuring of the USD 150 million FCCBs. The shares of Henkel India have surged on the news of merger plans with Jyothy Laboratories.

Overall, the market breadth is negative as of now, as half the total number of shares traded have declined in value.

Ahead in the day, we expect the markets to remain range bound until the inflation data is announced. Post that, the markets may show some direction. As we said in our morning update, lower inflation will be a trigger for the intra-day rally.