Markets To Remain Flat

As was expected, the Indian markets have been trading flat to negative post opening in today’s session. The Sensex and Nifty are currently a tad lower than what they opened at, down by 0.11% and 0.16% respectively. Both the indices opened volatile today ahead of the expiry of the July contract.

The Asian markets opened higher today, with the Hang Seng, Nikkei and Shanghai Composite all up by 0.05%, 0.52% and 0.2% respectively. This is on the back of some good results posted across the world after a heavy downfall on announcements by tech companies like Apple and Canon. Overnight, positive results by companies like Caterpillar and Boeing that beat industry estimates have resulted not only in the US markets cancelling losses, but also in the Asian markets opening higher. Nintendo too posted marginal lesser losses than in the previous year, adding minimally to the positive sentiment.

On the domestic front though, these results are not showing much impact due to the low correlation of these companies to the operations and dynamics of the Indian markets. The rupee has bounced back a little, providing relief and support to the markets, and is currently trading at 56.06/dollar. The Mid-Cap and Small-Cap indices are seeing more of a downward pressure today, losing about 1.13% and 1.05% respectively.

There is not much of a change in the way the sectoral indices are behaving today. The trends have remained the same, with Capital Goods, Metals, PSUs and IT trading lower and FMCG seeing some positivity because of its defensive nature and the impressive results postings.

Stock-specific action is being defined by the results announcements, with Wipro still bearing the burden of sluggish growth and guidance. The shares have tanked by close to 1% today. Raymond is down by 4.24% and is fast moving lower because of a reported loss of Rs 35 crore for Q1 FY13. Biocon has declined by 1.69% so far. The net sales for the company increased by 30% and the net profit was seen rising by 13% regardless of which investors are disappointed because of lower than expected EBITDA and net profit margins. 

The Managing Director of Deccan Chronicle, N Krishnan, posted his resignation earlier today on which the stock price of the company has plummeted by up to 3.58%.

HCL Technologies announced its quarterly and annual results yesterday, impressing investors and seeing a drastic rise in stock prices. Today, the effect of this is seen continuing, with mild rises in the stock price.

We see no reason for the markets to turn upward over the rest of the day, and maintain our outlook for today’s movement to be in the range of flat-to-negative.