Mixed Inputs Lead To Flat Markets

The markets opened higher today. Investors, however, still perceive the global cues to be bad, if not worse. Yesterday, Spain and Italy banned short selling of stocks for 3 months, providing some support to the markets. However, this step would only provide short-term relief, as there is no change in the fundamentals on which the market movement is functioning.

The Sensex and Nifty started trading higher in the early minutes of trading, and gradually reduced the upward trend. The Sensex has gained 25.25 points, currently trading 0.14% higher at 16900.6, while the Nifty gained 6.45 points and is currently trading 0.13% up at 5125.

Maruti Suzuki has seen a bounceback, and is trading 1.5% higher after the heavy selling witnessed over the past couple of trading sessions.

Earlier today, Wipro announced its Q1 FY13 results, with the revenue and EBIT higher than expected and the net profit coming in as per expectations. The IT major saw a sequential topline growth of 9.54% to Rs 8314 crore (IT services revenue). Wipro’s net profit grew by 6.8% QoQ to touch Rs 1580.2 crore. Though the figures have been above expectations, they are still sluggish and highlight the muted IT sector. The company’s guidance of 0.3%-2.3% QoQ growth is in line with the disappointing guidance provided for the past two quarters. The stock's prices have gone down by 3.13% post the results announcement.

Tata Global Beverages and HUL are seen trading higher by 3.68% and 5.32% respectively on the back of impressive results announced yesterday. On the other hand, Idea Cellular is currently trading 2.61% lower on account of poor quarterly numbers.

After the OMCs hiked the prices of petrol effective from midnight on Jul 24, 2012, the stock prices of HPCL and IOC have increased marginally by 0.04% and 0.07% respectively. BSE Auto is down by 0.12% on the back of the same news.

Data has recently come in for China’s Flash Purchasing Managers’ Index (PMI) for July 2012, compiled by London-based Markit Economics. This figure has increased to 49.5 in Jul 2012 from that of 48.2 seen in Jun this year. This has been the highest PMI number for China since Feb, although this is the fifth consecutive month of contraction in manufacturing. A level of above 50 defines an expansion of manufacturing and output. This implies that demand and employment still remain weak, but the slight positivity in the news has helped support the Asian markets overall. The Shanghai Composite Index opened low and is now more or less flat, trading lower by 0.02%.

Overall, the Asian markets started trades lower today over fresh concerns in Europe. This saw some moderation after the Chinese data release. The Hang Seng's opening was delayed till afternoon today due to extreme weather resulting from a typhoon. It opened 0.30% higher due to the wee improvement seen in Chinese numbers, but is now trading flat. The Yen has been gaining strength relative to other currencies, and this has been hitting exporters. The Nikkei too followed the same trend as the Shaghai Composite, and is currently lower by 0.04%.

Yesterday, international ratings agency Moody’s downgraded Germany, Netherlands and Luxembourg after the closing of the US trading session. Apart from Spain’s bailout fears, investors’ latest concerns include an official downgrading of the economy’s growth prospects.

On the domestic front, the rupee has been seen depreciating again, and is trading very close to the 56 level.The markets seem to be trading on a mild high due to these mixed cues.

PMI For China Over The Past 9 Months