Markets In Green, Power Stocks On A High

As expected in our morning update, the Indian markets opened positive in line with the global cues. At present, both the indices are trading higher, with the Sensex up by 40 points at 17008 and the Nifty up 12 points at 5153. Among the sectoral indices, Power, Capital Goods and Metals are trading higher in the green zone, while Auto, IT and Bankex are marginally lower in the red zone.

Other Asian markets have also pared their gains, with the Hang Seng and Nikkei trading higher, while Shanghai is trading marginally in losses. According to Bloomberg reports, Japan’s retail sales rose more than the forecast for May 2012, a sign that consumer spending could help sustain a rebound in the world’s third-largest economy. Further, there are media reports that China may opt for some kind of stimulus to boost its economy.

Back home, the Power stocks are continuing their winning momentum seen yesterday, and are trading higher in the green zone. NTPC and Tata Power are the leading index gainers, with 1.77% and 1.38% gains respectively. This is after the power companies hiked the tariff rates in Delhi. There are also reports of probable tariff hikes in other states soon. Metals stocks are also shining, with stocks like Hindalco, Sterlite Industries and Jindal Steel trading higher in the positive territory. FMCG heavyweights, which were beaten down in the past trading sessions, are seeing some buying, with stocks like HUL and ITC up by 0.1% and 0.3% respectively.

On the other hand, Tata Motors is among the leading index losers, down 1.28% to Rs 236 per share. IT stocks like TCS and Wipro are also trading lower by 0.5% and 0.36%. Other stocks like Hero MotoCorp and HDFC Bank are also trading lower marginally in the red zone.

Axis Bank and Yes Bank are trading lower by 1.5% and 1.2% respectively following media reports that HSBC is on course to offload its entire 4.8% stake in Axis Bank and is also planning to sell its 4.8% stake in Yes Bank. Strides Arcolab is trading 3.8% higher at Rs 766.50, extending yesterday’s gains after the company repaid FCCBs worth USD 80 million.

The market breadth, which indicates the overall health of the market, is strong as of now. On the BSE, 1140 shares have advanced and 614 shares have declined. 98 shares are unchanged.

We expect the market to remain volatile for the day.