Markets Negative On Weak Asian Cues

The Indian markets opened on a flat, negative note today on the back of weak global cues. Yesterday, the US Fed Reserve announced that it will use the short-term bonds for its long-term bonds, in what is called the Operation Twist strategy. Further, the Fed Chairman, Ben Bernanke, reduced the GDP forecast for this year down to the range of 1.9%-2.4%, from 2.4%-2.9% in Apr and its Apr 2011 forecast that growth for 2012 would range between 3.5%-4.2%. This sent negative sentiments across the globe. The Sensex and Nifty are down by 0.22% each.

The other Asian markets have opened on a negative note today. This was after the Fed extended its 'Operation Twist' program to push down long-end yields but disappointed some investors by failing to issue more far-reaching measures to boost the slowing economy. The Hang Seng and Shanghai are down by 0.94% and 1.57% respectively, while Nikkei is up by 0.72%.

Back home, among the BSE sectoral indices, Capital Goods continues to trade positive and is leading with 1.28% gains on the back of news that the government will impose an import duty of 21% on power equipments, which will benefit the domestic companies. Other indices such as Power, CD and FMCG are up with gains of nearly 0.5% each. In the losers pack, IT and Oil & Gas are down by 1% and 0.81% respectively.

Of the Sensex shares, index heavyweights BHEL and L&T are leading with gains of 2.33% and 1.11% respectively. Other Sensex gainers are Bharti Airtel, Cipla, and Tata Power, up by 0.74%, 0.37% and 1.42% respectively. Of the losers, RIL, TCS and Infosys are leading with losses of 2.39%, 1.52% and 0.98% respectively.

Cement stocks are seen under pressure after the news that these companies will be fined by the CCI over alleged cartelisation of cement and price hikes.

Among individual stocks, Kansai Nerolac is up by 1% on the back of news that the company will acquire a 68% stake in a Nepal-based paint major. Allcargo Global Logistics is down by 3% to Rs 131.60 on news of a buyback at Rs 142.50 per share.

The market breadth, which indicates the overall health of the market, is positive as of now. On the BSE, 1617 shares have risen, 1090 shares have declined and 146 shares are unchanged.

We expect the markets to remain volatile for today.