Lacklustre trades continue, IT share lead

Markets were trading flat with a negative bias amid lack of buying support as investors turned cautious after recent gains which pushed the Sensex above the 20,000 mark on Wednesday for the first time since January 30, 2013.

At 10:30AM the 30-share Sensex was down 5 points at 19,985 and the 50-share Nifty was down 3 points at 6,066.

Investors are likely to remain cautious ahead of the consumer price index and industrial production data due on Friday, followed by wholesale inflation data on Monday.

Most Asian markets pared early gains with the exception of Straits Times which was up 0.6%. China's Shanghai Composite was among the top losers in the region down 0.7% after data showed that consumer prices were up higher-than-expected. Among others, Hang Seng was down 0.3% and Nikkei pared early gains and was down 0.1%.

Among the sectoral indices on the BSE, the IT and FMCG indices were the top gainers while Capital Goods, Metal and Bankex were the top losers on the BSE.

In the Sensex pack, ICICI Bank, L&T and Reliance were down 0.7-1.4% each on profit booking after recent gains. Other losers include, Tata Motors and Sun Pharma.

IT stocks rose on the back of better-than-expected earnings by select US companies indicating that the world's largest economy is on the path of revival. Software majors earn most of their revenues from exports to the US. Infosys, Wipro and TCS were up 0.2-1.4% each.

HDFC extended gains and was up 0.9% at Rs 894 after it reported 17% year-on-year (yoy) jump in net profit at Rs 1,555 crore for the quarter ended March 31, 2013. India’s largest mortgage lender had profit of Rs 1,326 crore in a year ago quarter. Further, the directors have recommended a dividend of Rs 12.50 per share on face value of Rs 2 per share.

ITC extended gains and was up 0.8% at Rs 346 ITC as Uttar Pradesh government on Wednesday slashed VAT on cigarette/cigar from existing 50% to 25%, official sources said here. The decision was taken at the cabinet meeting chaired by Chief Minister Akhilesh Yadav.

Among other shares, ABB is trading lower by 2.5% to Rs 523 after reporting 10.7% year-on-year (yoy) drop in net profit at Rs 42.56 crore for the quarter ended March 31, 2013 (Q1), due to higher interest cost. The company had profit of Rs 47.64 crore in year ago quarter. The company’s interest burden increased by almost four-time to Rs 19.75 crore from Rs 5.40 crore during the recently concluded quarter.

The broader markets continued to trade flat with the BSE Mid-cap up 0.1% and the Small-cap index up 0.2%.

Market breadth was almost neutral with 824 gainers and 804 losers on the BSE.