Markets Holding Losses, Banking On Defensive Stocks

The Indian markets are holding their morning losses, with both the broader indices trading lower by almost 0.4%. Investors are taking cues from the global markets. Overnight, the US market posted a mixed set of economic data, and investors were also disappointed by the ECB president's views on the European economy. Among the sectoral indices, the favourite defensive bet, FMCG, is the only sector trading in the green, while all the others are trading lower in the red zone. Metals, Realty and IT plunged by more than 1%, dragging the markets downward.

The other Asian markets are trading in a mixed bag, with Hang Seng and Nikkei lower by 0.15% and 0.65% respectively, while Shanghai is trading around 1% up. The Chinese market opened trade in the negative territory, but bounced back in the past couple of hours of trade. Investors are speculating that the rate cut by the People’s Bank of China would boost economic growth.

On the other hand, European markets have opened their trade early in the red zone, extending yesterday’s losses. Major indices like FTSE, CAC and DAX are trading lower in the range of 0.2%-0.5% on the back of the ECB President's worries about the growth outlook of the Euro nations.

Back home, investors and traders booked profits on the Metals pack, which is reason why all the Metals stocks are trading lower. Jindal Steel, Sterlite Industries, Hindalco and Tata Steel are trading lower in the range of 1%-3%. Other index heavyweights like ONGC, L&T, Infosys, etc. are trading lower by more than 1%, dragging the broader indices lower. Similarly, stocks like Sun Pharma, BHEL, Dr. Reddy's Labs, NTPC, etc. are trading marginally in the red zone.

On the other hand, defensive bets, which are investors' favourite at uncertain times, are trading higher. HUL and ITC are trading higher by 1.44% and 0.86% respectively. Private banking players, including stocks like HDFC Bank and ICICI Bank are trading marginally in the green zone. Coal India, Tata Motors and HDFC are among those trading marginally in the green zone.

The Small-Cap IT stock Micro Technologies is trading 0.92% higher at Rs 148.25 after the company made an announcement that it has successfully deployed more innovative feature in Micro Lifeline, its intelligent scheduler and communication tool. Eros International Media is trading higher 1.76% higher at Rs 187.70 after the company reported signing a satellite television agreement with COLORS' Viacom18 Media.

The market breadth, which indicates the overall health of the market, is weak at the moment. On the BSE, 1370 shares have declined, 1214 shares have gained and 118 shares are unchanged.

We expect the markets to remain volatile with a negative bias, and advise readers to play with caution.