Markets turn weak; Nifty slips below 7,900

Sharp fall in the Asian stocks with Shanghai Composite losing 4% amid drop in the oil prices weighed on sentiment

arkets have turned weak owing to losses in the technology pack on account of profit booking and weakness in Index heavyweights RIL and HDFC.

At 11:05am, the S&P BSE Sensex was down 39 points at 25,777 and the Nifty50 was down 19 points at 7,896.

Also, sharp fall in the Asian stocks with China’s benchmark index Shanghai Composite losing 4% amid drop in the oil prices weighed on the sentiment.

Top 5 losers in the Sensex pack include M&M, TCS, RIL, Maruti Suzuki and Sun Pharma down between 0.5%-2%.

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(updated at 10:40 am)
 

Markets were trading  flat on Wednesday after gains in HDFC were offset by losses in IT majors Infosys and TCS along with index heavyweight Reliance Industries. However, select steel stocks gaining the most following an outperform rating by a foreign brokerage.

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At 10:40am, the S&P BSE Sensex was up 10 points at 25,827 and the Nifty50 was down 6 points at 7,909. The broader markets came off their early highs with BSE Midcap and Smallcap indices up 0.1%-0.5% each. Market breadth was positive with 1247 gainers and 803 losers on the BSE.

Data pertaining to the US crude oil inventories by the American Petroleum Institute (API) amid wild swings in the oil prices will be keenly watched out by the investors.

"Though Monday’s rise was slow, the uptrend remained intact, allowing for objectives of 8000-8076 to be attempted today. However, oscillators look less convincing, suggesting that the upside momentum may be losing pace, and could see volatility or tendencies to drop once near 8076. Alternatively, if such volatile moves fail to slip below 7847, expect the medium term objectives of 8200-8300 to remain in play," Geojit BNP Paribas said in a technical note.

 

Sectors & Stocks

BSE Metal index was the top gainer up 2.4% followed by Capital Goods and Power indices. However, BSE IT and Realty indices were the top losers.

Among IT majors, TCS and Infosys were down 0.3%-1.8% each on profit taking after recent gains post their fourth quarter earnings while Wipro was up 1.5% ahead of its fourth quarter earnings later today.

HDFC was up nearly 2% after the mortgage lender informed stock exchanges that it has in-principle agreed to sell up to 10 per cent of its stake in HDFC Standard Life through offer for sale.

Metal stocks also flared up in early trades with Tata Steel and Hindalco up over 3% each.

Credit Suisse in its coverage on the steel sector has an outperform rating on the Tata Steel, JSW Steel and Jindal Steel and an underperform on state-owned SAIL. The outperform ratings are based on four positive developments viz. inventory cycle bottoming out globally, US dollar weakness has helped stablised cost curces, Chinese demand stimulus and nearly 100 million tonne of idling capacity unlikely to return.

The note also added that domestic steel prices have surged by $50/$60/tonne after the imposition of the 'minimum import price', Enterprise Value/tonne is likely to edge higher to $1,500/tonne plus levels in tandem with rise in prices.

Tata Steel, JSW Steel and Jindal Steel were up over 2% each while state-owned SAIL was up nearly 3% despite underperform rating by the foreign brokerage.

Mindtree was up over 3% after it reported a 21.2 per cent growth in net profit at Rs 156 crore for the quarter ended March 31, against the year-ago period. Revenues jumped 44.2 per cent to Rs 1,324 crore due to healthy order-booking and traction in the digital business.

CRISIL has rallied 11% to Rs 2,197 on the BSE in early morning trade after ratings agency reported 40% year on year (YoY) jump in its consolidated net profit at Rs 78.60 crore for the first quarter (Q1) ended March 31, 2016. The company had profit of Rs 56.32 crore in the corresponding quarter of the previous year.

Steel Strips Wheels Ltd (SSWL) has surged 6% to Rs 406 on the BSE after the auto parts & equipment makers announced that it has received exports order for supply of high speed trailer (Caravan) steel wheels for the European trailer market.

Global Markets

Asian shares are trading mixed on Wednesday amid a depreciating US dollar and volatility in the crude price movement.  Data pertaining to the US crude oil inventories by the American Petroleum Institute (API) will be closely monitored. China’s Shanghai Composite, Hong Kong’s Hang Seng and Singapore’s Straits Times indices are down between 0.2%-0.7%. However, Japan’s Nikkei has edged 0.6% higher after the yen eased against the US dollar.

US stocks closed mixed in overnight trades with energy shares emerging as top gainers following  a rise in oil prices. Fall in the technology pack and consumer discretionary stocks on account of mixed earnings reports hurt the sentiment. The Dow Jones industrial average ended up 0.3% at 18,054 and the broader S&P 500 gained 0.3% to close at 2,101. However, the Nasdaq ended down 0.4% at 4,940.