WPI At 7.25%, Markets Continue Flat Trades

The Indian markets are trading with marginal gains after the announcement of the WPI figure for June 2012, which came in at 7.25%, lower than the street's estimation of around 7.6%. From the negative territory, the markets turned into the positive zone. However, they are not able to move higher, and this could be on account of the revision of the WPI figure for Apr 2012 from 7.23% to 7.5%. Among the sectoral indices, Heathcare, Bankex and Consumer Durables traded higher. IT and Metals are among the leading losers, both down by over 1%.

Of the other Asian markets, Hang Seng is trading marginally higher in the green, while Shanghai has extended it’s morning losses, lower by almost 1.7%. The Chinese market is trading lower after Bloomberg reported the Chinese premier Wen Jiabao as warning that the nation’s recovery is yet to build up momentum, fueling speculations about extra economic support measures being announced. Japanese market is closed for the day. 

On the other hand, the European markets have opened marginally in the red today, with major indices like FTSE, CAC and DAX trading in the negative zone.

Back home, Bharti Airtel continues to be the leading index gainer, trading higher by 3.75% at Rs 319.35. Stocks like Dr Reddy’s Labs, Maruti Suzuki and Cipla are up by over 1.5%. Others like NTPC, Tata Motors, BHEL, Hero MotoCorp and Coal India are marginally in the green zone.

On the other hand, the Metals heavyweights Tata Steel and Jindal Steel are trading lower by 3.35% and 2.3% respectively. Other stocks like Infosys, Tata Power, TCS, GAIL India, etc. are trading lower by more than 1% each. ITC, Hindalco, L&T, Wipro etc. are also marginally in the red zone.

Castrol India is trading marginally higher by 0.68% at Rs 559 after the company declared its June 2012 quarter results. The company has posted a net profit after tax of Rs 1209 million for the quarter as compared to Rs 1425 million for the quarter ended June 30, 2011. Its total income has increased from Rs 8126 million for the quarter ended June 30, 2011 to Rs 8675 million for the quarter ended June 30, 2012.

The market breadth, which indicates the overall health of the market, is weak. On the BSE, 1366 shares have declined, 1239 shares have gained, and 113 shares are unchanged.

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