Markets Hold Morning Losses

The Indian markets are holding their morning losses as there is no positive news to lift the sentiments. For the past couple of weeks, the markets seen to be in a bit of a consolidation mode, as there have not been any major declines or surges in the broader indices. At present, the Sensex is trading lower by 50 points at the 17680 levels and Nifty is trading 12 points down at the 5368 levels.

FMCG, which is one of the defensive bets and a favourite with investors, is dragging the market lower, down by almost 2%. Others losers include Metals, Consumer Durables and IT. On the other hand, the Auto, Capital Goods and Oil & Gas indices are trading higher in the green zone.

In the Asian markets, Hang Seng and Shanghai are trading lower by 0.06% and 0.32% respectively. The Japanese index Nikkei is trading smartly higher by 1.88% at the 9093 levels. This is after Bloomberg reported that the Yen has slid versus all its major counterparts as the Asian stocks have risen and the extra yield investors receive from US securities climbed to the highest in four months, damping the allure of Japan’s currency. Further reports also said that the Nikkei 225 Stock Average is trading at a six-week high after Chinese Premier Wen Jiabao said that slowing inflation will allow more room to adjust the monetary policy in the world’s second-largest economy.

European markets have opened their early trades with the DAX and CAC down by 0.05% and 0.20% respectively and FTSE in marginal gains of 0.06%. Reports said that the stocks in the region were little changed before US reports that may show house building near a four-year high, while manufacturing in the Philadelphia region contracted at a slower pace this month.

Back home, ITC continues to widen its intra-day losses, presently trading in losses of 3.14% at Rs 259.35. The Metals group is also trading lower, with Hindalco, Sterlite Industries, Tata Steel and Jindal Steel down in the range of 0.70%-3%. Other stocks like Sun Pharma, SBI, ICICI Bank and HUL too are trading marginally in the red zone.

Cipla is the leading index gainer as of now, trading higher by 3.17% at Rs 360. Auto stocks like Hero MotoCorp, M&M, Tata Motors and Bajaj Auto are also in the green zone. BHEL, Tata Power, Dr Reddy’s Labs, L&T and HDFC are some of the others that are trading positive.

Jet Airways is trading 1.04% down at Rs 391.30. Business Standard reported that jet fuel or ATF prices were hiked by over 3.2% today, in what is the third straight increase since July 2012, adding to the cost burden of the cash-strapped airlines.

The market breadth has turned weak at this hour. On the BSE, 1306 shares have declined, while 1235 shares advanced and 142 shares are unchanged.

We expect the markets to remain volatile, with a negative bias.