Markets Trading Flat, Investors Eye WPI

The Indian markets opened positive today, but soon stepped into the negative territory. At present, both the indices are trading marginally lower, with Sensex and Nifty down by almost 0.05% each. Investors and traders are eyeing the WPI inflation figure for Jun 2012, which is going to be released today. Among the sectoral indices, Metals, IT and Realty are all trading lower more than 1%, dragging the market southwards. Healthcare, Auto, Consumer Durables and FMCG are trading higher in the green zone.

Other Asian markets are trading in a mixed bag, with Hang seng trading marginally in positive, while Shanghai is trading lower by over 1%. The Chinese markets are trading lower after Bloomberg reports of Chinese premier Wen Jiabao's warning that the nation’s recovery is yet to build up momentum. This fuelled speculations that extra economic support measures may be announced after a Cabinet meeting this week.Japanese market is closed for the day.

Back home, the Metals stocks are showing a lacklustre performance, with scrips like Tata Steel and Jindal Steel among the leading index losers, trading down by 3.11% and 2.74% respectively. Investors are continuing to sell off the IT pack after the disappointing numbers that were posted by Infosys. The three majors, Infosys, Wipro and TCS, are trading lower in the range of 1.1%-1.7%. Other stocks like ICICI Bank, Hero MotoCorp, NTPC, RIL, etc. are marginally in the red.

On the other hand, Bharti Airtel is the leading index gainer up 2.19% at Rs 314.55. Pharma stocks, which are the defensive bets, are also trading higher, with Cipla, Dr Reddy’s Labs, Sun Pharma, etc. trading in gains of over 1%. Other stocks like ITC, Coal India, SBI etc are trading marginally in the green zone.

Atul Auto is trading marginally higher in the green zone, up 0.25% at Rs 118.85 after the company made an announcement that it has entered into a long term supply agreement with Greaves Cotton for the supply of diesel engines for its three-wheelers. The tenure of the agreement is for a period of seven years. Pursuant to this agreement, Greaves will be the single source supplier for the needs of Atul's diesel three-wheelers.

The market breadth, which indicates the overall health of the market, is strong as of now. On the BSE, 1156 shares have declined and 1051 shares have advanced, while 105 shares are unchanged.

We expect the markets to remain volatile for the day.