Volatile Trading Day Ends Flat, Positive

The Indian markets witnessed volatile trades for most of the day and finally closed on a flat, positive note. The Sensex and Nifty closed with gains of 0.21% and 0.20% respectively. Weak WPI numbers and a subdued performance from the IT bellwether Infosys have dented investor sentiments.

Among the sectoral indices, FMCG and Oil & Gas were the leading gainers, higher by 0.75% and 0.53% respectively. Others like Realty, Bankex, Power, Pharma, and PSU also closed in the positives. On the other hand, the Consumer Durables, IT, Tech, Auto and Capital Goods indices ended the day lower.

The WPI data for Sept 2012 came in around noon today, at 7.81% as against the street's expectations of around 7.7%. With the inflation figure on the higher side, it is expected that the RBI will maintain status quo in its next monetary policy meet. A lower possibility of a rate cut took the markets further southwards.

The other Asian markets saw mixed results today. While the Hang Seng and Nikkei closed the day higher by 0.06% and 0.51% respectively, the Shanghai market finished lower by 0.30%. According to reports, buyers were encouraged by Chinese inflation data, which signalled that Beijing had room to ease policy further to shore up growth in Japan's main export market.

The European indices are currently trading higher, with FTSE, CAC and DAX up in the range of 0.45%-1.18%. The markets were lifted by hopes that a struggling Spain will request a bailout, which would lower its borrowing costs.

Dow Jones Futures is currently trading higher by 0.38 points or 0.29% at 13283, indicating a positive sentiment in the US markets.

Back home, Bharti Airtel, BHEL, Cipla and Hindalco Industries were among the leading gainers, closing higher by 1% each. On the other hand, Maruti Suzuki was the leading index loser, down by 2.46% at Rs 1338.20 per share. Infosys extended its losses from Friday and closed lower by 1.25% at Rs 2365 per share after reporting lower-than-expected numbers in the quarterly results.

Index heavyweight Reliance Industries (RIL) rose 0.53% ahead of its Q2 results today. Early this month, the company signed a 15-year heavy crude oil supply contract and an MoU with Venezuelan state-run oil company Petroleos de Venezuela SA (PDVSA) for the further development of Venezuelan heavy oil fields.

The market breadth, which indicates the overall health of the market, was on the positive side. Out of the 2981 stocks traded on the BSE, 1494 advanced, 1353 declined and 134 remained unchanged.

We expect the markets to remain volatile with a negative bias ahead of the result announcements of major companies. Investors are advised to remain cautious.