Trades Lacklustre; Auto, Metals Drag

The Indian markets are trading in a very narrow range, with the broader indices moving alternately between the green and red zones. At present, the Sensex and Nifty are trading lower by almost 0.10%. It seems that the market participants are taking a wait-and-watch approach ahead of the US Presidential elections scheduled for tomorrow (Nov 6, 2012).  However, media reports suggest that irrespective of whether Romney or Obama gets selected, there would be no major impact in the trade relations with India.

Among the sectoral indices, Auto, Metals and Power are in the red zone, while Healthcare, FMCG and Consumer Durables are trading in gains.

The other Asian markets are also trading lower, with the Hang Seng, Nikkei and Shanghai are trading down in the range of 0.1%-0.5% respectively. Reports suggest that car majors Hyundai Motor Company and Kia Motors Corp slid on findings that the companies had overstated claims about gas mileage.

Back home, the Metals pack is showing a lacklustre performance. Hindalco is the major loser, down by 2.46% at Rs 114.80 per share. Jindal Steel and Tata Steel are also trading lower by 1.22% and 1.18% respectively. Among the Auto stocks, Bajaj Auto, M&M, Hero Motocorp, etc. have registered losses in the range of 0.30%-1.9%. Other stocks like HUL, L&T, Tata Power, Wipro, ICICI Bank, RIL, etc. are trading in the negative territory.

On the flip side, in the defensive bets, Dr. Reddy’s Labs and Cipla are the leading index gainers, trading up by 1.43% and 1.19% respectively. Others like ITC, BHEL, Coal India, HDFC Bank and ONGC are currently higher in the green zone.

Allahabad Bank reported a disappointing set of Sept 2012 quarter numbers. The bank's profit stood at Rs 234 crore against Rs 488 crore in the similar quarter last year. The net NPA of the bank stood at 2.1%, which is higher by 101 bps on a sequential basis. This has seen the stock plunging by almost 6% to Rs 130 per share.

The market breadth, which indicates the overall health of the market, is slightly on the negative side. On the BSE, 1295 shares have declined while 1241 shares advanced, 132 shares are unchanged.

We expect the markets to remain in narrow range with a negative bias for the latter part of the day.