Trades Open Slightly Negative, Likely To Remain Flat

The Indian markets opened slightly negative today and gradually made their way upwards, though not going into positive but hovering around it. The Nifty has been holding the 5400 level in today’s trade. Currently, the Sensex is trading lower by 0.10% at 17868.42 while the Nifty is trading lower by 0.13% at 5414.1.

This flat trading of the Indian markets has been due to the overpowering global cues acting on markets worldwide. Japanese data that reflected a trade deficit has weighed the Asian markets down considerably and has taken a toll on the Indian markets. Overnight, even the US markets closed negative due to heavy selling seen in the technology sector with Apple and Facebook seeing massive erosion of capitalisation.

The Asian markets opened negative today because Japan announced a trade deficit due to weakening demand from Europe and China. Europe’s sovereign debt crisis and China’s slowdown have both affected the export driven Japanese economy. With this the Hang Seng, Nikkei and Shanghai Composite are currently trading even lower than the early market hours, lower by 0.76%, 0.25% and 0.48% respectively.

What investors worldwide are keeping an eye on are the outcome of the Greek Prime Minister’s meetings with European leaders this week and the minutes of the previous meeting to be released by the U.S. Federal Open Market Committee later today. These numbers are expected to work on the market direction and give the hope on a turnaround by European leaders some definition. On the Greek front, there has been speculation that the country will request for more time to implement austerity measures required by international creditors, said media reports.

On the domestic front, only 5 of the 13 sectoral indices are currently trading in the positive, led by Healthcare, Auto and Consumer Durables. In the healthcare sector Cadilla and Ranbaxy have been the major movers with an upward trend of 2.25% and 1.98% respectively. According to media reports, The US Food and Drugs Administration is removing 27 Abbreviated New Drug Application (ANDA) approvals held by generic drugs maker Ranbaxy Laboratories. In the Auto sector, Ashok Leyland, Bajaj Auto and Hero Motocorp have been pushing higher.

We expect the markets to remain range-bound and flat. The Nifty will continue hovering around the 5400 level.