Markets Remain Dull, Jindal Steel Down 7%

The markets have continued to trade in losses in the absence of positive triggers. The Sensex is down 0.3% and Nifty is trading lower by 0.43%. The global markets have also turned into the red at this hour.

Meanwhile, Deepak Parekh, Chairman, HDFC, has said that a downgrade is inevitable if current environment of policy paralysis persists. He also said that if country is downgraded to junk status, we will see substantial outflows. Parekh emphasised that the government needs to urgently resolve coal and power issues. He opined that the fiscal deficit can still be reduced by lowering the subsidiaries and increasing the price of diesel.

The opening in the European markets was negative today, with markets in London trading below Friday's closing. CAC and DAX are down by nearly 0.7% each. Yesterday, the German business index saw a fall in sentiment, which is dragging the markets down. Besides, there are fears that the Chinese economy is slipping into a slowdown, which is another big potential drag to the world economy and the global financial markets.

Of the indices, FMCG, IT and Teck are trading in green while all the others are in the red. Metals is the worst performer, down by 3.23%. CD, CG and Bankex have also taken losses of over 1% each.

Among the Sensex stocks, TCS is the top gainer with 1.6% intra-day returns. Another Tata group company, Tata Power, is also up 1.45% but has come down from its morning high. IT giants Infosys and Wipro have also held their intra-day gains. In the Metals and Mining space, Jindal Steel is down by 7%, Sterlite is down by 5% and Hindalco has lost 3%. Tata Steel is also lower by 2.5% and Coal India has tanked 1% so far.

In other stocks, Wockhardt has received USFDA approval for its products. The stock, however, has shown weakness as it will trade in the T2T category from September onwards as per the BSE notice. Pipavav Defense has surged by 2.1% as the company has allotted 1 crore equity shares on conversion of convertible warrants.

Computer hardware company HCL Infosystems has gained 21% today so far amid strong volumes on the news that Lenovo is in talks to buy out the promoter’s stake in the company.

The advance-decline ratio on BSE has further worsened, with more than two shares declined for every one share advanced. The broader sentiment is very negative.

We believe that the market will close in the negative amid this strong negativity.