Indices Under Pressure, ITC Gains On Q2 Numbers

The Indian markets have widened their losses at this time. The 30-share Sensex is down 108 points and the 50-share Nifty is down 35 points. Meanwhile, investment bank Macquarie has said that the Nifty may touch 6600 in a year's time.

Currently, the EU leaders are in a meeting in Brussels to discuss the ongoing debt crisis in the region. The leaders have agreed to have a single supervisor for the Euro zone. The FTSE and CAC have opened almost flat today, while DAX has declined by 0.21% on a profit booking mood.

In the Asian markets, Nikkei saw a positive closing to the week. Hang Seng is 0.2% up. The Shanghai index, however, is down 0.16% after China’s ministry of commerce sounded a note of caution on the nation’s export sector, saying that there is no conclusive sign of a recovery in place. Data released on Friday also showed that FDI in the country dropped sharply in Sept 2012.

Back to the Indian markets, most indices are trading in the red as of now. Only three indices are in positives, with CD witnessing leading gains of 0.85%. The FMCG index is also up 0.5% after ITC's results, while the IT index is trading flat ahead of the TCS results announcement today. Metals, Power, Oil & Gas and Bankex, on the other hand, are down over 0.8% each. The Banking index, which surged yesterday, is down on profit booking today.

Of the Sensex stocks, ITC is the top gainer, with 1.3% gains. The company reported a 21% rise in its net profit, which is ahead of analysts’ expectations. Its sales also grew by about 20% on a YoY basis. Bajaj Auto and Wipro are trading with 0.7% gains each, while Dr. Reddy’s Labs and Infosys are both higher by 0.5%. Tata Motors is nearly flat in its trades.

TCS has lost 0.6% ahead of its quarterly results due today. GAIL, Hindalco, Jindal Steel, Tata Power, Sun Pharma, HUL, Sterlite and Coal India have all lost over 1% at this time. Bharti Airtel is the underperforming for the second day in a row on the decision of refarming the 2G spectrum in the 900 Mhz band.

Among others, the shares of Strides Arcolab have gained as much as 2.8% as the company received USFDA approvals for two more cancer drugs. Besides, it is also its Sept quarter results are also slated to come in this afternoon.

Nagarjuna Oil Refineries has gained about 18% on the news that the two major oil companies are eyeing a stake in the company. Kingfisher Airlines has dropped 5% ahead of its deadline to respond to the civil aviation authorities on why its license should not be cancelled.

Overall, the market breadth is negative, with a total 51% declines.

Ahead today, we expect the markets to remain volatile with a negative bias.