Trades Continue To Slide

As we expected in our morning update, the Indian equity markets have opened lower and are trading in the red. The Sensex looks set to lose another 100 points today and the Nifty is down 23 points at 5264.

The Asian markets are trading in the red today too, with Hang Seng and Nikkei down by more than 1% and the Shanghai trading lower by 0.35% from yesterday’s closing.

Of the sectoral indices, only HC and Realty are in the green. The Auto index is the top loser, down by nearly 1%.

From the other Sensex stocks, Hindalco is up by 1.3%, partially wiping out the losses made during the week. Tata Power is up for the second consecutive day today on the MERC order to increase the fuel adjustment cost ceiling from 10% to 20%. Cipla, Wipro, HDFC Bank, Bajaj Auto and Dr. Reddy’s Labs also feature in the gainers list. Metals stocks like Jindal Steel, Tata Steel and Sterlite as well as Auto stocks like Tata Motors, Maruti Suzuki and M&M are trading lower at this time. Infosys and TCS are also in negatives.

Among the other stocks, Orchid Chemicals has reported the sale of its Aurangabad drug unit to Hospira for USD 200 million. The share price of the company is up 1.5%. The shares of Tulip Telecom are flat at this hour. Fitch has downgraded the company from 'junk' to 'default' status after it failed to repay the FCCBs. Lanco Infra is up 3.7% so far and Glenmark is up 2.89%. Wockhardt is also showing strength for the second day today.

On the other had, JP Infratech is down by 4%. Neyyeli Lignite, REC, Crompton Greaves, HPCL, Tech Mahindra, etc. are all down between 2%-3%.

The shares of United Spirits and United Breweries have lost today after seeing strong gains in the last few days.

The advance-decline ratio is currently negative, with over half of the total stocks traded showing a decline.

We expect the markets to continue showing volatility. The Euro markets may provide some impetus, though they may also see some volatility ahead of Ben Bernanke’s speech due tomorrow.