Nifty seen heading towards 7,550; HDFC, Maruti Suzuki dip 3%

HDFC was the top loser along with other index heavyweights ITC and RIL

Markets extended losses after the first hour of trade weighed down by profit taking in index heavyweights with mortgage lender HDFC leading the decline along with ITC and Reliance Industries.

At 10:40am, the S&P BSE Sensex was down 202 points at 24,968 and the Nifty50 was down 52 points at 7,562. In the broader market, the BSE Midcap and Smallcap indices were trading flat with mixed bias. Market breadth was neutral with 956 losers and 934 gainers on the BSE.

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The Indian rupee was trading unchanged to the US dollar at Rs 66.66 compared to the previous close. The Indian currency had gained in early trades on dollar sales by exporters.

HDFC was the top loser down 3% on reports that the mortgage lender is planning to make an additional one-time special provision of Rs 450 crore in the fourth quarter ended March 2016, to further strengthen balance sheet.

ITC continued to remain weak and was down 1.3% after the company recently shut down its cigarettes factories amid uncertainties over the health warnings on cigarette packs.

Infosys was down 1.6% on the back of multiple block deals in the counter. Around 5.6 million equity shares representing 0.24% of total equity of Infosys changed hands, the BSE data shows. However, the name of the buyer and seller of the equity shares was not immediately ascertained.

Maruti Suzuki was down 3% on concerns that adverse currency movement is expected to impact the company’s operating margin in the coming quarters.

Among other shares, Future Retail (FRL) has rallied 5% to Rs 136 on the BSE in early morning trade in otherwise subdued market after the company said the asset management firm SSG Capital Management will acquire 40% stake in Future Supply Chain Solutions (FSC) from existing shareholders, including Future Retail, for Rs 580 crore.
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(updated at 10am)
Markets opened flat, amid muted cues from Asia, with auto shares leading the decline along with index heavyweights Reliance Industries and ITC.
 

At 10am, the S&P BSE Sensex was down 179 points at 24,722 and the Nifty50 was down 49 points at 7,566.

"The critical 7600 region was able to hold fote yesterday too, but it is evident from the lackluster trades which were restricted to a very tight range, that caution continues to dominate proceedings. To this end, like yesterday, not only would the 7680 region challenge upsides as anticipated yesterday too, but the turn lower thereof could see atleast as far as 7565. Alternativley, direct push above 7680 could negate the overall bearish tendencies, reviving the 8100-8300 objectives for the medium term, which, though is less anticipated at this point," Geojit BNP Paribas said in a technical note.

Meanwhile, minutes from the Fed's March 15-16 policy meeting suggest that the Federal Reserve remains apprehensive about an interest rate hike before June as fears of a global economic slowdown resurfaced.

Foreign institutional investors were net sellers in equities worth Rs 494 crore on Wednesday, as per provisional stock exchange data.

Global Markets

Asian markets are trading cautiously post the release of the Fed minutes with Japan’s Nikkei, Hong Kong’s Hnag Seng and China’s Shanghai Composite down between 0.2%-1%.

Overnight, the surge in crude oil lifted energy stocks higher with the Dow .DJI  up 0.64% while the S&P 500 .SPX closing 1% higher and the Nasdaq soaring 1.6%.
 

Sectors & Stocks

Rate sensitive sectors such as Auto, Bankex and Capital Goods were among the top losers while Metal, Power, Oil and Gas indices were the top losers.

Index heavyweights Reliance Industries, HDFC and ITC were down 1.3%-2% each contributing the most to the losses in the benchmark indices.

Bank shares continued to remain weak post the rate cut by the RBI at its monetary policy review on Tuesday. HDFC Bank, ICICI Bank and SBI were down over 1% each.

Maruti Suzuki was down nearly 3% on concerns that adverse currency movement is expected to impact the company’s operating margin in the coming quarters.

State-owned engineering major BHEL was up 1.7% ahead of it flash results for the year ended March 31, 2016 to be released later today.