GDP Figure Fails To Bring Cheer

The Indian markets are holding their morning losses and trading lower at noon today. Both the major indices are trading lower by almost 0.50%. The GDP number for Jun 2012 came in at 5.5% as compared to 8% posted in the similar period last year. The number has came in as a surprise as the street’s expectations were anywhere in the range of 4.9%-5.3%. Though the economic environment has worsened, the numbers have still come in higher by 20 bps on a sequential basis (Mar 2012 quarter GDP stood at 5.3%).

Metals is the worst performing index today, lower by over 1%. Others like Power, Auto and FMCG are also in the red. Only the Healthcare index is trading in gains at present.

The other Asian markets are also continuing to trade lower. They have been hit by Japanese industrial output data, which was surprising lower in Jul 2012, fuelling the negative sentiment.

European markets have also opened mildly on the lower side. Investors are counting down to Ben Bernanke's key speech.

Back home, Hero MotoCorp is the leading index loser, lower by 2.41% at Rs 1781. The Metals stocks have continued with their poor performance, with Hindalco, Sterlite Industries, Tata Steel and Jindal Steel trading down between 0.55%-2.20%. Other stocks like NTPC, BHEL, HUL and Bajaj Auto too are in losses of over 1% each. Wipro, Tata Power, GAIL India, etc. are marginally in negatives.

Bharti Airtel is the leading index gainer, 1.5% up at Rs 246.40. Investors are seeing some buying opportunity in the scrip as it was beaten down heavily in recent trading sessions. Other stocks like Cipla, SBI, ONGC, HDFC, etc. are trading higher.

Tech Mahindra is in 1.66% gains, its shares trading at Rs 805.30. These were on reports that telecom giant BT has sold 14.1% (17.9 million shares) in the company to institutional investors for Rs 1395 crore at Rs 777.73 per share. BT has been reported to have said that it would consider further such sales in the future.

The market breadth, which indicates the overall health of the market, continues to be strong. On the BSE, 1296 shares have advanced, 1191 shares have declined and 117 shares remain unchanged.

We expect the markets to remain volatile with a negative bias, and advise investors to be cautious.