Markets Still Trading Lower, Metals Drag

The Indian markets continue to trade lower. Investors are disappointed with the outcome of ECB yesterday. At present, they are holding their morning losses, with the Sensex and Nifty trading lower 0.85% and 0.90% respectively. Among the sectoral indices, Metals is sharply down by over 2%, dragging the markets lower. Capital Goods, Auto and Realty are also trading lower by more than 1%. The Healthcare and IT indices have recovered from their early lows and are now witnessing marginal gains.

The Nikkei and Hang Seng are trading lower by 1.13% and 0.87% respectively as of now. While the Chinese market, Shanghai, is trading over 1% higher after media reports that China has slashed the transaction fee for equity trading by 20%.

The European indices have opened on a subdued note, though in the positives. Major indices like CAC, DAX and FTSE are trading higher in the range of 0.2%-0.4%. Investors are seeing some buying opportunity as some of the indices were beaten down heavily (more than 2%) yesterday after the disappointing ECB meet.

Back home, the Metals pack is dragging the market lower. Stocks like Sterlite Industries and Tata Steel lower by 2.77% and 2.59% respectively, and others like Jindal Steel and Hindalco are also 2.26% and 2.22% down respectively. Among the rest, Coal India, ICICI Bank, Tata Motors, L&T, Tata Power, M&M, etc. are trading with losses in the range of 1.6%-2.5%. TCS, RIL, HUL and Infosys are trading marginally negative.

NTPC continues its rally for the third day, remaining the leading index gainer. The scrip is trading higher by 1.84% at Rs 166.30 after the robust expansion plans announced with its strong Jun quarter performance. Other stocks like Wipro and Dr Reddy’s Labs are trading higher by 1.25% and 1.62% respectively. HDFC Bank, Cipla and HDFC are also in marginal gains.

HCL Tech is trading marginally lower by 0.62% at Rs 521.50, despite the announcement that the company was ranked the No.1 engineering services provider by leading globalization advisory firm, Zinnov.

The market breadth, which indicates the overall health of the market, is weak at the moment. On the BSE, 1497 shares have declined, 1025 shares advanced and 131 shares are unchanged.

We expect the market to continue showing a negative bias.