The frontline Indian equity benchmarks have managed to recover some of the lost ground in late morning trade, with the BSE Sensex and the NSE Nifty marginally lower. Weakness in top-three IT majors (TCS, Infosys and Wipro) and index titans like RIL and Tata Motors is being offset by gains in ITC, Gail, Coal India, HUL and DLF.
At 11:14am ( IST), the BSE Sensex was 16,840 down 72 points over the previous close. It had earlier touched a day’s high of 16,918 and aday’s low of 16,742. It opened at 16,915.
NSE Nifty was quoting 5,091 down 23 points over the previous close.It has earlier touched a day’s high of 5,119 and a day’s low of 5,062. It opened at 5,114.
DLF, Hero MotoCorp, HDFC, SBI, M&M, Maruti Suzuki,Coal India, Bajaj Auto, Ranbaxy, HUL, ITC, were among the notable leaders in the Sensex and the Nifty.
RIL, Infosys, Wipro, TCS, BHEL, Tata Power were among the notable losers in the Sensex and the Nifty
The BSE Small-Cap and BSE Mid-Cap index was trading flat.
FMCG, PSU, Realty,HC, Metals, Bankex, Teck, Consumer Durables, Realty,Metal indices are the gainers.
Auto, Oil and Gas, Power, Consumer Goods Power, Teck and IT indices are the losers.
Market participants are taking stock of the situation, a day after a smart intraday recovery that was triggered by the deferment of GAAR by a year. IT shares have taken a beating after Cognizant scaled back its CY12 revenue growth guidance from 23% to 20%. Gail, GSPL and Petronet LNG have gained after sector regulator referred the issue of marketing margin back to the Centre.
Shares of capital goods giants - BHEL and L&T are under some pressure after posting strong gains in the previous session. Hindalco and Asian Paints are subdued ahead of their Q4 FY12 results later today. Realty major DLF is a notable winner after the Finance Minister withdrew TDS on immovable properties. IDFC is up while Kotak Mahindra Bank is slightly down before their Q4 results.
The advance-decline ration on BSE is positive with the Small-Cap and Mid-Cap indices out-performing the frontline indices. The INDIC VIX on the NSE is up ~1% at 20.
The main indices have not been able to extend gains from the previous session as Asian markets are mixed after a positive start.
The Chinese index is down ~0.3%. The Nikkei in Japan, the Kospi in South Korea, the Hang Seng in Hong Kong and the S&P ASX 200 index in Australia are marginally higher.
Things went along expected lines on Monday. While stocks got pummeled initially in the wake of unfavourable outcome of elections in France and Greece, the market rebounded in the afternoon after the Finance Minister deferred the implementation of the proposed GAAR by a year. Pranab Mukherjee has also rolled back a few other seemingly unpopular measures. The rupee, which took a fresh tumble manage to rally 1%.
What is even more heartening is that markets in Europe and the US managed to bounce back after the initial knee-jerk fall. But, the Greek stock benchmark sank 7% following a hung election verdict. Greece is perhaps more of a problem than France. So, brace for some fresh uncertainty in the eurozone in the near term.
We expect a flat to mildly positive start as most Asian markets are trading in the green territory. The direction during the rest of the session will hinge on domestic corporate results and trend in global markets. Watch out for IIP data later in the week. FII flows are the major cause for concern at the moment. Some material progress on reforms could provide a kicker here.
Monday's market moves led to the formation of a bullish piercing line on candlestick chart, with the NSE Nifty closing near 200-DMA of 5120. The Nifty needs to cement its position above 5120 for at least three trading sessions in order to negate the short term downtrend.
IT shares will be in focus after Cognizant scaled back its CY12 dollar revenue growth estimate. Asian Paints, Hindalco, IDFC and Kotak Mahindra Bank are among the index companies announcing their Q4 results today. Meanwhile, the debate on the Finance Bill could continue in parliament.
RIL may remain subdued amid the continued standoff with the Oil Ministry over the KG-D6 issues. Crude oil should also be watched closely over the next few days to see if it cracks further amid increasing signs of slowdown across the globe. SKS Microfinance will be in the spotlight after reporting a loss for the January-March quarter.
Key Results Today: Asian Paints, Bajaj Hindusthan, Ceat, Central Bank of India, CESC, Dena Bank, Emami, Federal Mogul, GIC Housing, Glenmark Pharma, Hindalco Industries, IDFC, Kotak Mahindra Bank, Oriental Hotels, Puravankara Projects, Shriram Transport Finance, Tata Coffee, UCAL Fuel and Whirlpool.
Trend in FII flows: The FIIs were net sellers of Rs 6.3bn in the cash segment on Monday while the domestic institutional investors (DIIs) were net buyers of Rs 2.73bn, as per the provisional figures released by the NSE.
The FIIs were net sellers of Rs 4.35bn in the F&O segment on Monday, according to the provisional NSE data.
The foreign funds were net buyers of Rs 5.12bn in the cash segment on Friday and the Mutual Funds were net sellers of Rs 2.03bn on the same day, according to the SEBI figures.
Global Data Watch today: Germany Wholesale Price Index (Apr), Australia Trade Balance (Mar), Germany Industrial Production (Mar), US NFIB Business Optimism Index (Apr), US IBD/TIPP Economic Optimism (May), US Philadelphia Fed’s Plosser speech, US Fed’s Fisher speech, UK BRC Shop Price Index (Apr).