Markets have a cautious start; Nifty hovers at 8,740

ONGC and RIL are the top gainers, while pharma space is sluggish.

The markets have started the proceedings on a cautious note post the late sell-off witnessed in the previous trading session. The mixed cues from the Asian front are also responsible for the tentative start to the day. At 9:40AM, the Sensex is at 28,802, higher by three points and the Nifty is at 8,748, down one point.

The benchmark indices had touched one-week closing lows on Wednesday, with the barometer Sensex slipping below the psychological 29k mark to end at down 244 points or 0.8%.

"After series of up move, equity markets lost nearly a percent in a volatile trading session on Wednesday. Initially, sentiments were positive tracking improvement in CPI inflation figure, which was announced post market on Monday. The positivity was reflecting in the banking counters as a majority of the stocks were trading in green. However, sudden fall in the last half an hour across the board including banking, changed the entire picture and pushed the domestic bourses in red," said Jayant Manglik, President-retail distribution, Religare Securities.

"Though this profit was impending after the recent up move in last two weeks but pace of decline caught the participants’ completely off-guard. Having said that, our overall positive bias is still intact so we suggest traders to maintain buy on dips approach till the Nifty upholds above 8550 spot level," he adds.

Further, foreign institutional investors were net buyers in equities to the tune of Rs 108 crore on Wednesday, as per provisional stock exchange data.

SECTORS AND STOCKS

The midcap and smallcap indices have recovered marginally, up 0.3% each at 11,113 and 11,936 respectively, this morning after the pounding received in the previous session.

The IT index is subdued ahead of the TCS fourth quarter earnings, scheduled later in the day, as the street expects the IT major to report sluggish revenue growth. The TCS stock is trading at Rs 2613, lower by 0.4%, on the BSE. Among the other IT heavyweights, Infosys and Wipro are trading flat at Rs 2215 and Rs 606 respectively.

The oil sector is in focus after PSU OMCs announced a reduction in retail selling price of petrol and diesel post trading hours on Wednesday. Indian Oil Corporation (IOCL) announced a reduction in retail selling price of petrol by 80 paise per litre at Delhi (including state levies) with corresponding price revision in other states. ONGC is quoting higher by 2.8% at Rs 326, Cairn India is up 2.5% at Rs 235 and RIL has gained 1% at Rs 933. IOC is however flat at Rs 373.

Among individual gainers, ONGC has jumped by 2.5% at Rs 325 to top the gainer's list on the BSE and is accompanied by RIL, up 1% at Rs 935. Tata Motors and Hindalco have added 1% each at Rs 546 and Rs 136 respectively.

Gammon India has surged nearly 18% at Rs 24.45 on the Bombay Stock Exchange after the infrastructure company annnounced that it has secured two new projects worth Rs 840.45 crore.

On the other hand, Sesa Sterlite is seeing oprofit booking after recent gains. The stock has shed 1.5% at Rs 204 to emerge as the top loser on the BSE. Pharma stocks are also seeing some selling pressure, with Dr Reddy's shedding 1.1% at Rs 3710 and Cipla losing 1.1% at Rs 685.

Global Markets

Asian shares were trading mixed on Thursday tracking overnight gains on Wall Street. Shares in Japan witnessed profit taking after the dollar declined on the back of weak US economic data. The Nikkei was down 0.5% while Straits Times was down 0.2%. However, shares in China were up 0.7% and Hang Seng was up 0.1%.

Major US share indices ended higher on Wednesday led by energy shares amid a rebound in crude oil prices while hopes that earnings would not be weak as earlier expected also boosted sentiment. The Dow Jones industrial average ended up 76 points at 18,112.61, the broader S&P 500 gained 11 points at 2,106.63 and the tech-laden Nasdaq gained 34 points to close at 5,011.02.