Sensex slips below 27k; IT, metals and auto weak

HDFC, Dr Reddy's, Hindustan Unilever and TCS are the key losers in this morning's trades.

The markets are trading in the red this morning in line with the cues from the global market front and ahead of the impending April derivatives expiry later in the day.

At 9:40 am, the Sensex was quoting at 26,965, lower by 260 points and the Nifty was at 8,156, down 82 points. The broader markets are also trading weak in tandem with the benchmark indices, with the midcap and smallcap indices losing more than half a percent each at 10,342 and 10,880 respectively.

The Sensex had shed 170 points and Nifty had ended below the technically crucial 8,250 mark on Wednesday in what was a volatile session of trade. There is no respite in selling pressure this morning either, and unwinding of positions ahead of the impending April derivatives expiry later in the day is set to make it another volatile session of trade. Among corporate earnings, IDFC will announce its Q4 results during the day.

KEY LEVELS

Technically, Nifty is not sustaining above the 200- DMA i.e. above 8,260 levels indicates cautious sign, analysts say.

"Selling pressure is likely to continue which will drag the Nifty towards 8,170-8,140 levels. On the flip side, 8,260 levels will act as a immediate resistance levels, any move above the same will extend its leg towards 8,310-8,340 levels," points out a morning note from Nirmal Bang.

As regards the derivative segment, in call options 8,300 and 8,400 strikes added huge buildup analysts believe these are short positions. On the other hand in put options, there is hardly a relevant buildup; profit booking was visible in 8,100 and 8,300 strikes. Maximum buildup has shifted to 8,400 call and 8,200 put options, analysts say.

"Roll-over in Nifty and Bank Nifty is on the higher side at 55.17% and 49.44%, respectively but in terms of open interest is low. The total (open interest) OI of the market is Rs 259,406 crore and the stock futures OI is Rs 70,048 crore," said a derivative market note from Angel Broking.

RUPEE

The rupee opened lower by 21 paise at 63.51 per dollar this morning as against 63.30 on Wednesday as the weak stock markets are keeping the rupee under pressure.

GLOBAL MARKETS

Asian stocks slipped early on Thursday after US data overnight showed the economy grew much more slowly than expected in the first quarter. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5%. Japanese shares witnessed selling pressure after markets opened for trading after a holiday on Wednesday. The benchmark Nikkei was down 1.9% while the Shanghai Composite eased 0.2%. Shares in Hong Kong were weak with the Hang Seng down 0.9% and the Straits Times was down 0.5%.

US stocks eased on Wednesday tracking lower-than-expected first quarter US GDP growth. The US GDP growth for the first quarter expanded by just 0.2%. The Dow Jones ended down 75 points at 18,035.53, the S&P 500 ended down 8 points at 2,106.85 and the Nasdaq lost 32 points at 5,023.64.

European equities closed sharply lower in the previous session as investors reacted to sharp gains in the euro against the dollar after weaker-than-forecast US GDP data. The DAX witnessed its biggest one-day percentage drop since March 2014.

SECTORS AND STOCKS

All the sectoral indices are in the red, with IT, metal and auto doing the most damage.

In the IT space, TCS and Infosys have shed more than 1% each, while Wipro has lost about half a percent.

In the metal space, Vedanta, JSW Steel, Tata Steel and Jindal Steel have lost between 1% and 4% each.

In the auto space, Hero MotoCorp, Tata Motors and Maruti have shed around half a percent each.

Among individual stocks, HDFC has extended its previous day’s weakness after it posted marginal 8% growth in standalone net profit for the March quarter at Rs 1,862 crore. The stock is quoting at Rs 1178, lower by 1.37%, to emerge as the top loser on the BSE. Dr Reddy's, Hindustan Unilever, Bharti Airtel and TCS are the other key losers on the BSE.

On the other hand, Axis Bank has extended its previous day's gains after the bank’s net profit grew 18% to Rs 2,181 crore on the back of a 20% in net interest income and 21% increase in other income. The stock has zoomed by 3% at Rs 569 in an otherwise weak market to top the gainer'slist on the BSE.

Reliance Industries and ONGC are in focus after the government eased the rules for gas field development. Both the index heavyweight stocks have added upto half a percent eachat Rs 852 and Rs 308 respectively.

Bengaluru-based biopharma major Biocon has firmed up by 2.2% at Rs 453 after reporting a 78% rise in its net profit for Q4 FY15 to Rs 201 crore. The company's PAT was powered by an exceptional item - the sale of Syngene shares, which amounted to Rs 105 crore.

Jindal Steel & Power has slipped by 4% at Rs 138 on reports that the CBI on Wednesday filed a chargesheet against Chairman Naveen Jindal, former Jharkhand chief minister Madhu Koda, former minister of state for coal Dasari Narayan Rao and former coal secretary H C Gupta, for an alleged conspiracy in securing a coal block in Jharkhand.

The market breath is weak. Out of 1342 stocks traded on the BSE, there are 474 advancing stocks as against 820 declines.