Markets Looking Weak

As expected in our morning update, the Indian markets opened sideways though in the negative territory, taking cues from the other Asian markets. At present, both the indices are trading lower, with the Sensex down by 58 points at 17463 and Nifty down by almost 22 points at 5295. Among the sectoral indices, Metals has been beaten down heavily by 1.26%. Power, Capital Goods and Realty are also trading lower in the negatives. While IT, FMCG, Teck and Oil & Gas are those trading higher in the green zone.

The other Asian markets have also witnessed sharp cuts today, with major indices like Hang Seng and Shanghai trading lower by 1.44% and 1.21% respectively, while Nikkei is down by almost 1%. The markets are trading lower on media reports on the Chinese Premier, Wen Jiabao's statement that real estate market curbs to discourage speculation would be a long-term policy. The comments hit the property sector in Hong Kong. The nervous trades are also owing to the disappointing US data on Friday.

Back home, the Metals stocks are showing a lacklustre performance, with Jindal Steel, Hindalco and Tata Steel trading lower in the range of 1.2%-1.8%. Maruti Suzuki is the leading index loser, trading 1.85% lower at Rs 1194.25. Other stocks like HDFC, HDFC Bank, L&T and Bharti Airtel are also trading lower by over 1%. Dr Reddy’s Labs, RIL, SBI, BHEL et.c are trading marginally in the red.

Among others, the IT stocks are witnessing higher trades as investors are speculating that the rupee depreciation will help the companies in the sector to post better Jun 2012 quarter results. Scrips like TCS and Infosys are trading higher by 1.44% and 0.25% respectively. Others like ICICI Bank, ITC, ONGC and HUL are trading marginally higher in the green zone.

TTK Prestige is trading marginally negative, down 0.01% at Rs 3319, reacting to the Jun 2012 quarter numbers. The total income has increased from Rs 2338.40 million for the quarter ended Jun 30, 2011 to Rs 3032.20 million, while it posted a net profit of Rs 306.80 million for the quarter ended Jun 30, 2012 as compared to Rs. 253.40 million for the quarter ended Jun 30, 2011. Engineers India is up by 3.75% at Rs 236.85 after the company informed the exchange that the company has bagged an integrated refinery expansion project of BPCL, Kochi.

The market breadth, which indicates the overall health of the market, is weak as of now. On the BSE, 1120 shares have declined and 1057 shares have advanced, while 98 shares are unchanged.

We expect the markets to remain volatile for the day, with a negative bias.