Markets Flat, Nifty Closes Above 5700

The markets remained mostly directionless ahead of the US Presidential elections slated for tomorrow. By closing, Sensex was up by 0.05% at 18,749. The 50-share Nifty index, however, broke the crucial 5700 level to close at 5704.

The Asian and European markets mostly saw a heavy sell-off. All the key Asian markets were in the red by closing, with the Nikkei and Hang Seng closing down by nearly 0.5% from Friday’s closing. The Shanghai markets were also down 0.14% by the end of day.

The European markets are also in the red zone. All three key indices are showing a decline. FTSE is in losses of over 1% and CAC and DAX have registered nearly 0.7% intraday losses each so far.

Back home, the defensive sectors outperformed the broader market. The FMCG index saw a price appreciation of 1.1%. Healthcare was also up by 0.34% ahead of index major Cipla's results declaration. Bankex was up 0.1%. All the other sectoral indices traded in the red. Power saw a heavy sell-off and declined by 0.68%. The Auto index was also down 0.58% on profit booking.

Among the Sensex stocks, ITC was the top gainer, higher by 0.71%. Dr. Reddy’s Labs, which posted handsome Q2 earnings, gained 1.1%. The shares of Cipla have gained 0.87% ahead of its results this afternoon. State-owned Coal India gained 0.78%. HDFC Bank, HDFC, BHEL, Maruti Suzuki, ONGC, Infosys and HUL were also in the gainers list.

On the other hand, Hindalco, Jindal Steel and Bajaj Auto closed with losses of 2% each. Tata Power lost nearly 1% ahead of its Sept quarter results due tomorrow. Tata Steel, TCS and Tata Motors were also down in the red.

On the Sensex, the advance-decline ratio remained in favour of the bears, as 18 stocks declined in value and 12 saw advances.

The shares of Tech Mahindra gained 0.37% ahead of its Q2 results. The company reported its earnings to the exchanges after market closing today. The company posted a net profit of Rs 160 crore. One can expect heavy trades in the counter tomorrow.

Jubilant Life Sciences also reported its earnings today after close of trades. Its income from Operations rose by 16% to Rs 1225 crore and the net profit shot up by 92% to Rs 152 crore. Expect to see good price appreciation in the company's stock in tomorrow's trades.

The shares of Allahabad Bank tanked over 2% as the bank saw its net profit wiped out by 52% on a YoY basis. Higher provisions against bad loans eroded its margins. The Net Interest Margin plunged 11%. Its gross non-performing asset (NPA) ratio also rose sharply to 2.95% as against 1.96% in the previous quarter.

On the macro front, Finance Minister P. Chidambaram has said that the economic growth in FY13 could slow to as little as 5.5% this fiscal. However, he added that we will see grow at 7% by FY14. The market may track react to this statement tomorrow.

The advance-decline ratio on the BSE indicated a negative bias, as the total declines were higher than the advances.

In conclusion, we expect volatility to remain persistent due to the US Presidential elections. Indian equities will take their cues tomorrow from the closing levels seen in the US markets.