The key Indian stock indices have declined in early morning trade, tracking weakness in other Asian markets and overnight losses on Wall Street. The undertone has been hit by concerns that a global economic slowdown will hurt corporate earnings. The sentiment in the domestic market is also cautious ahead of Thursday's important session. Results from IT giants TCS and Infosys will vie for investors' attention along with the latest IIP data. Going forward, Indian markets will continue to digest corporate earnings and global developments. The next trigger for further ascent will come from positive movement on the policy front post the presidential elections.
At 9:18 am (IST), the BSE Sensex was at 17,540, down 77 points over the previous close. It had earlier touched a day’s high of 17,553 and aday’s low of 17,516.It opened at 17,553.
NSE Nifty was quoting at 5,327, down 18 points over the previous close. It had earlier touched a day’s high of 5328 and aday’s low of 5314.It opened at 5315.
The BSE Small-Cap index was trading flat at 0.04%.
L&T, SBI, HDFC Bank,NTPC are among the gainers in Sensex and Nifty.
RIL, Tata Power, HUL, Maruti,ITC,Bajaj Auto, ICICI Bank, ONGC,Hero MotoCorp, Sterlite are among the losers in Sensex and Nifty.
IT, Realty, Teck, Auto, Oil and Gas,Bankex, PSU, Power,Metal, FMCG indices are the gainers.
Consumer Durables indices is only the gainer.
The broader market continues to show resilience even as the Large-Cap indices are under some pressure. FMCG, Oil & Gas, Auto, Realty and Metals indices are pacing the decline. Consumer Durables, Pharma, Banking, Power and Capital Goods indices are seeing action in select stocks.
Shares of Multi Commodity Exchange of India Ltd. (MCX) and Financial Technologies India Ltd. (FT) climbed after capital market watchdog SEBI allowed the Jignesh Shah-promoted companies to start trading platforms in other asset classes, including equities and bonds. While MCX is India's leading commodity exchange, MCX-SX currently offers trading in currency futures. On the other hand, FT is a prominent name in designing and developing software programmes for the capital markets.
While shares of MCX rose as much as 7.5%, that of FT gained as much as 9.5% before losing some of the early bounce.
Asian stock indices were trading mostly lower on worries that a worldwide economic downturn will crimp corporate earnings amid apprehensions about the eurozone leaders' ability to decisively contain the long-running debt crisis.
The MSCI Asia Pacific Index fell 0.2% as of 11:23 a.m. in Tokyo, heading for its longest losing streak since May. Almost four stocks fell for every three that rose on the regional index, which is extending a four-day, 2.2% decline.
Technology companies and commodity producers led losses in Asian markets.
The Chinese market remains in focus on growing expectations of further stimulus from the policymakers.
Chinese Premier Wen Jiabao said on Tuesday that the government’s top priority was now stabilizing economic growth rather than long-term restructuring.
European equities, on the other hand, rose and Spanish and Italian debt yields eased on Tuesday after the eurozone finance ministers agreed to give the first batch of aid to Spain's troubled banks by the end of July.
US stocks fell for a fourth successive session on Tuesday as the dollar advanced on uncertainty over Europe, and engine maker Cummins reduced its sales forecast.
Energy, utilities and technology stocks added pressure to already-down US markets after Applied Materials and AMD both warned that their revenues would fall short of forecasts
Disappointing expectations from Cummins also dampened the mood on Wall Street. The engine maker's stock fell 9% after it slashed its sales forecast for the year.
Indian stock indices hit a four-month high on Tuesday, showing surprising resilience in the face of persistent headwinds – both domestic and global. The Sensex and the Nifty could have some more steam, particularly if FII flows remain positive.
Markets in the US closed in the red amid growing concerns about slowdown in corporate earnings while Asian benchmarks too are down this morning. European markets managed modest gains after Spain received a bailout for its fragile banking sector.
Investors must temper their expectations from the Indian markets as much of the macro-economic problems are yet to be conquered. Inflation remains elevated and might spike further if the overall monsoon rains are below average. The rupee is still weak amid rising twin deficits. Some encouraging comments have been heard from New Delhi about a few pending reforms, but it remains to be seen how many of those will see the light of day.
In the near term, markets will react to results from the likes of HDFC, TCS, Infosys and HDFC Bank apart from data on IIP and inflation. The RBI is under pressure to act, but it is hamstrung due to lack of progress on the fiscal side and stubborn inflation. So, don’t really expect a rate cut on July 31.
The Nifty on Tuesday decoupled with its Asian peers after advancing towards the 5350 level. The next few days would be crucial for the Nifty. The ongoing intermediate uptrend will get a shot in arm if the Nifty surpasses the trading range of 5260-5360.
Meanwhile, the Reserve Bank of India (RBI) has released the gist of comments and suggestions received on the draft guidelines for licensing of new banks in the private sector.
Watch out for MCX and Financial Technologies after market regulator SEBI allowed Jignesh Shah-promoted companies to start trading platforms in new asset classes, including equities.
Trend in FII flows: The FIIs were net buyers of Rs 6.06bn in the cash segment on Tuesday while the domestic institutional investors (DIIs) were net sellers of Rs 4.88bn, as per the provisional figures released by the NSE.
The foreign funds were net buyers of Rs 3.35bn in the cash segment on Monday while the Mutual Funds were net sellers at Rs 3.71bn, according to the SEBI figures.
Global Data Watch today: RBA Deputy Governor Lowe Speaks, Westpac Consumer Confidence, Germany consumer price index, Japan machine tool orders, France current account balance, German 10-year bond auction, US trade balance, US wholesale inventories, US EIA crude oil stocks, US 10-year note auction and FOMC minutes.