Markets Lower On Global Cues

Markets opened marginally lower today following a weakness in global markets. Japanese economic data has come out to be been very disappointing and this coupled with a decline in US equities on Friday has dampened the market sentiment here too. In a rather lacklustre trade the markets have been quite range bound today.

Asia saw a very weak opening today with Japanese stocks falling by as much as 1.3 per cent in early trades. The Japanese economic data released by the Ministry of Finance there, indicated a drop of 10.3 per cent in exports in the month of September from a year earlier. At the same time, imports increased by 4.1 per cent. This resulted in a trade deficit of 558.6 billion Yen (USD 7 billion), which is wider than the expected gap of 547.9 billion Yen. This gap was a result of a major drop in shipments to China and Western Europe which fell by 14 per cent and 26 per cent respectively. Exports to the US increased by just about 0.9 per cent, failing to compensate for the drastic drop in exports to China and Western Europe.

On Friday, US stocks fell sharply over disappointment on the earnings and guidance front. This resulted in the Nasdaq declining by 2.2 per cent. The overall impact of this is being felt on the Asian markets including India, which witnessed a weak opening earlier today.

On the domestic front, although there is weakness in the broader indices, the BSE Midcap index is almost flat, trading lower by a marginal 0.09 per cent while the Small cap index is higher by 0.14 per cent. Of the 13 sectoral indices, only 3 are trading in the green, with the highest gain seen in IT, which has been heavily pushed upwards by an over 2 per cent rise in TCS after its impressive Q2FY13 results were announced. Among those trading significantly lower were Metal, FMCG and Realty, which are down by 0.72 per cent, 0.84 per cent and 1.02 per cent respectively.

TCS, Dr Reddy’s Lab and Cipla, up by 2.12 per cent, 1.26 per cent and 1.02 per cent respectively are among the top gainers this morning while Ambuja Cements, Tata Motors and ITC, down by 2.23 per cent, 1.49 per cent and 1.48 per cent respectively were among the top losers.

The weakness seems to be spread across the board as the overall breadth which is negative with 569 advances and 731 declines suggests. We expect the markets to continue to trade flat due to a weak global scenario and no positive domestic factors immediately in place to push it up.