UPA's Damage Repair Doesn’t Help Markets

The Indian markets continued to trade weak, though the markets tried to pull back after Finance Minister P Chindambaram and Parliamentary Affairs Minister Kamal Nath held a press conference to assure that the government was not under any threat after the DMK’s exit from the UPA alliance. Despite the assurance, market participants prefered to stay out of the markets and opted to sell on rallies. 

Nifty at 12:15 PM is hovering down near the 5700 mark by 46 points and Sensex is trading below the 19,000 mark at 18,873, down by 135 points. Both the indices are trading lower by 0.70%-0.89%.

The advance-decline ratio is on a negative side in the afternoon trading session. On the NSE, 1124 shares are trading in red and 252 shares are trading in green. 

Top 5 NSE Gainers: Cipla is trading up by 1.93% and is the top gainer on NSE, followed by Hindustan Unilever, Lupin, Asian Paints and Tata Consultancy Services. 

Top 5 NSE Losers: Reliance Infrastructure is trading down by 6.34% and is among the top losers on NSE, followed by Jaiprakash Associates, DLF, ACC and SBI.

From the sectoral pack, FMCG and Healthcare continue to outperform the markets and are trading in a positive zone. Realty, PSU and Bankex are the top losers among the sectoral pack.

The Asian markets are trading mixed. China’s Shanghai Composite and Japan’s Nikkei 225 are trading higher in the range of 1.99%-2.29%. Hang Seng is trading in a positive zone, up by 0.81%. KOSPI, Taiwan Weighted and Straits Times are trading in a negative zone. 

Buzzers: Hindustan Unilever (HUL) has surged more than 2%, trading at Rs 462 after the UBS upgraded the stock to ‘Buy’ from ’Neutral’. UBS raised the stock price target to Rs 540 from Rs 500.  

HDIL stocks have tumbled by more than 16% in today’s trade, after rating firm CARE rating has downgraded the Rs 2,095 non-convertible debentures of Mumbai-based developer HDIL due to the ongoing delays by the company in servicing its NCD payment obligation. It has downgraded two tranche of NCDs worth Rs 1,894 crore from ‘BBB+’ to ‘D’ grade and another worth Rs 200 crore from A3+ to ‘D’ means instruments which are in default or going to default soon. 

We had mentioned yesterday that the market will be in the range of 5670-5770. We expect it to consolidate in this range. A big move is only expected if the market breaks this range.