Markets Flat On Global Uncertainty; Maruti Down 3%

The Indian markets saw a mild opening today on account of uncertain global cues. The US presidential elections have been creating a great deal of of uncertainty among investors, resulting in a highly volatile but moderately moving market in the US and directionless trading across the globe. Although the outcome of the elections would not make a difference to the equity markets, the sense of uncertainty provoked by the close call between the two contestants has been the cause of such choppy trading.

Moreover, concerns have heightened in Europe overnight, making the global macro environment rather gloomy. In Greece, a parliamentary vote is scheduled for later this week on a round of tax raises and budget cuts demanded by the country’s lenders – the European Central Bank, the European Commission and the International Monetary Fund. In Spain, worries increased with the release of data on employment. Official statistics indicated a rise in jobless claims by 128,242 in Oct 2012, bringing the total number of unemployed to 4,833,521, a rise of 2.7%.

With this, the Sensex is now trading higher by 5.68 points or 0.03% at 18768.55 and Nifty is trading lower by 0.75 points or 0.01% at 5703.45.

Though the broader indices are more or less flat, midcaps and smallcaps are trading stronger, higher by 0.49% and 0.37% respectively. Only 2 of the 13 sectoral indices are trading negative at the moment – Oil & Gas and Auto, which are lower by 0.42% and 0.14% respectively. The overall market breadth seems to be slightly positive, with 1126 advances and 855 declines.

Among the majorly moved stocks is Cipla, which has gained 2.81% and is trading at its 52-week high after posting robust quarterly numbers. The company saw a YoY net profit growth of 62% in Q2FY13 at Rs 500 crore and the growth in revenues stood at 24% to touch Rs 2200 crore.

Maruti Suzuki is trading lower by nearly 3% after media reports said its workers are planning a hunger strike and other peaceful protests to force the management to take back the 548 employees sacked after the recent violence seen at the company’s Manesar plant.

The rupee has been depreciating lately due to a cumulative of global cues and this has resulted in the currency reaching a month and a half's low. This, in turn, has given a boost to the currency fluctuation-sensitive IT industry, which is dependent on exports for more than 75% of its total revenues. Among IT companies, Tech Mahindra is trading significantly higher (up by 2.24%). This was on account of a good results announcement and improved positioning based on two acquisitions made during the quarter, one of Hutchison Global Services and the other being a 51% stake in Comviva.

Overall, we expect the markets to remain flat and trading to remain choppy due to the ripples caused by global cues.