Markets Remain Range-Bound, Hindalco Up 2%

The Indian equity indices have remained range-bound with a negative bias after the negative opening this morning. The BSE Sensex has lost 0.5% while Nifty is down 0.4% at this time.

Ahead of US Fed Chairman Ben Bernanke’s speech tomorrow, the Asian shares too have tumbled. Hang Seng has declined by 1.3%, while Nikkei is down by about 1%. The Shanghai market has remained flat with a negative bias. Commodity prices in Asia have declined, and a recent report suggests that the western economies will now prefer to manufacture nearer their home territory, which will impact the major Asian economies, especially China.

The opening in the European markets has been similarly negative. The absence of key events in the global markets has indicated that the higher valuations in the Indian markets are not sustainable.

Investors are now keenly looking out for Ben Bernanke's speech tomorrow. The markets will also await the outcome of the ECB’s critical policy-setting meeting on Sept 6.

On the domestic turf, the Parliamentary deadlock has continued, with the House adjourned till noon today.

On the indices front, the scenario has not changed much since what was seen in the morning. HC and Realty have managed to remain in the green. CG is the top loser, moving southwards by 1.28%.

From the Sensex stocks, Hindalco is witnessing 2% gains. Cipla, Wipro and Tata Power are each up about 1%. Bajaj Auto and HDFC Bank are both trading with 0.7% gains. GAIL India, however, has plunged by 2.6%. Jindal Steel, Tata Steel, Maruti Suzuki, L&T, NTPC, Hero MotoCorp, HDFC, Sterlite, ICICI and TCS have all seen over 1% intra-day losses.

Among other stocks, Tech Mahindra has tanked 5.5% as British Telecommunications is offloading its stake in the company. Glenmark Pharma and Lanco have also held their ground with over 3% gains. Realty major DLF is up by around 3% at this hour.

Investment bank UBS has advised investors to remain defensive on Indian equities. It is ‘neutral’ on IT, ‘underweight’ on the Auto, Bank, Cement and Oil & Gas sectors and ‘overweight’ on the FMCG, Pharma and Power stocks.

The advance-decline ratio on the BSE is still negative. A total of 50% of ‘A’ group shares haves declined in value, as have 52% of the ‘B’ group shares.

Due to the absence of strong positive cues, we expect the markets to remain volatile and continue with its trend of a negative closing today too.