Markets Volatile Despite Growth In IIP

After their initial directionless trades, the Indian markets have turned volatile. The benchmark Sensex is trading with 0.5% losses, while Nifty is down 0.4%. The main drag on the indices has been Infosys' result and the August IIP data.

In the Asian markets, Nikkei has closed in marginal losses, while Hang Seng saw 0.6% gains and Shanghai closed marginally up.

The opening in the European markets was sombre, with all three key indices showing negative trades.

Earlier in the day, IT bellwether Infosys announced its Sept quarter results, where it posted 3.5% growth in the topline, which was as per the market expectations. However, the company lowered its annual guidance, which turned the investor sentiment into negative. The stock is down by 5% at this time. The shares of Wipro are also down by 1.6%. TCS, which was down in the morning, recovered by afternoon and is trading with more than 1% gains as of now.

The IIP data for Aug was also announced today. As per the data, the industrial output in the country grew by 2.7% in the month against the street's expectations of 1%. The Jul IIP number was revised to -0.2% from 0.1% as reported earlier. The growth in the IIP is fanning hopes that the RBI may not go in for a rate cut. The partial recovery in output may be considered by the RBI as the current rates have not damaged the investment sentiment in the country.

There are no significant developments on the indices front. Only CD and HC are trading in some gains, while most of the others are flat in their trades. Teck and IT are down by over 1% after Infosys’ results announcement.

Speaking of the Banking index, ICICI Bank is trading in losses as the hopes for an interest rate cut have diminished partially. SBI, Kotak Mahindra Bank and Axis Bank are also in the red.

Telecom companies like Reliance Communications, GTL and Tata Communication have surged today after the government granted infra status to the telecom towers. Cement stocks have continued their bullish run, and most cement stocks are trading in gains.

The shares of BHEL were down 1.6%, while L&T dropped 0.7% after the IIP data showed that the Capital Goods sector has continued its negative growth rate.

Deccan Chronicle Holdings has surged by 5% after it sold its IPL team Deccan Chargers to Kamala Landmarc.

The advance-decline ration on the BSE is in favour of advances. Ahead today, though, we expect the market to show volatile trades following the jolt to the rate cut expectations.