Indices trade weak; Oil shares slip

The markets were trading marginally in the red after investors turned cautious and booked profits ahead of the budget session.

The 30-share Sensex slipped 37 points and  the 50-share Nifty was down 7  points  at 25,332 and 7,570  levels, respectively.

 

The broader markets outshined their Largecap counterparts. BSE Mid-cap and BSE Small-cap appreciated 0.5% each.

 

Asian Markets:

 

 Asian shares fell on Wednesday, echoing losses on Wall Street as concerns about escalating violence in Iraq eclipsed stronger economic data.

 

MSCI's broadest index of Asia-Pacific shares outside Japan fell about 0.4 percent, while Japan's Nikkei stock average lost 0.5 percent.

 

Japan’s Nikkie plunged 0.6% , Hong Kong'Hang Seng Index lost 0.03% and Shanghai Composite Index dipped  0.5%whereas Straits Times Index was up 0.1%.

 

Crude:

 

The ongoing violence in Iraq continues to impact oil prices. Oil edged back above $114 a barrel halting its decline from a nine-month high of $115.71, amid the Iraq crisis, supply disruptions in Libya and expectations of a decline in US crude oil inventories.

 

Local currency: 

 

The rupee weakened by 19 paise to 60.32 against the US dollar in early trade today at the Interbank Foreign Exchange market on high demand for the American currency from importers.

 

Sectors likely to be affected by the Union Budget:

 

The finance ministry is planning a range of tax incentives in the budget to aid cash-starved infrastructure developers raise long-term capital at competitive rates, create a framework of fast-track build large-scale projects that are of vital importance for India to compete in global markets. Stocks likely to benefit are Larsen, BHEL and IRB Infra.

 

The power sector is expected to gain the limelight with Prime Minister Narendra Modi’s pledge to revitalize the power sector, by improving the performance of distribution utilities, and ensuring that the companies are subjected to financial discipline.

 

Rain Check:

 

The monsoon has covered half of India's landmass four days behind the usual schedule, failing to recover from a late start has slowed sowing of summer crops in a country where halfof the farmland still lacks irrigation. 

 

India's Mahindra and Mahindra is likey to face the pressure of poor rains as the tractor sales will be harmed. One third of the company's revenues come from tractor sales which are largely dependent on farmers' incomes that can get severely impacted due to any shortfall in rains

 

In addition, Dabur India and Hindustan Unilever are the two stocks in the broader markets which may incur losses.

 

Gainers on the Sensex:

 

Metal shares continue the winning streak with Coal India, Hindalco, Tata Steel and Sesa sterlite up between 0.3%-1.3%, each

 

BSE Auto index is up 0.6% with Hero Motocorp and Tata Motors gained between 0.4%-0.8%

 

Sun Pharma  recouped from losses and has gained 0.8%, followed by Dr Reddy’s Lab up 0.2%

 

On the losing end,

 

BSE Bankex dropped 0.2% with ICICI Bank and Axis Bank down 0.7-1%. In contrast, HDFC twins gained between 0.1-0.7%
  

Index Heavyweight ITC dipped 0.9% on account of heavy profit booking

 

Technology stocks continue to dwindle in red with TCS and Wipro down 0.1-0.2%, each

 

Oil and Gas stocks remain under pressure due to deepening of Iraq crises. ONGC and Reliance have shed 0.8% and 0.9%, each

 

Hot Stocks:

 

AstraZencea Pharma India was down 2.5% to Rs 1,124 on reports that the capital market regulator directed stock exchanges to monitor the delisting process of the drug maker.

 

Godrej Properties has moved higher by 5.5% to Rs 250 after huge block deal executed on the counter on the Bombay Stock Exchange (BSE).