Markets remain weak; Metals and IT drag

Global sentiment affects markets back home; Sensex down 100 points

Markets are in a state of stagnation this morning as the global sentiment has turned nervous. The Sensex is quoting at  22,577, down 137 points and the Nifty is at 6760, down 50 points. The broader markets, which have been buzzing in the recent past, have actually rebounded into the green after opening in a spot of bother. The midcap index is at 7374, up 42 points and the smallcap index is at 7511, up 38 points.  

The markets had witnessed fresh record closing highs in an unabated hope rally, despite a consolidation-laden flat closing, on Thursday, with the Sensex inching higher by 12 points and the Nifty ending flat with a positive bias.  

Overnight, the Nasdaq suffered its biggest drop in two-and-a-half years on Thursday after another sharp selloff in biotech and momentum names. The S&P 500 also posted its biggest percentage loss since February 3, while the Nasdaq has dropped 7% from its closing high for the year, set on March 5. The Dow Jones industrial average plummeted by 266 points or 1.62% to end at 16,170. The S&P 500 lost 2%, to close at 1,833. The Nasdaq Composite dropped 129 points or 3.1% - its biggest daily average loss since November 9, 2011 - to 4,054.

The European shares also closed lower, after fluctuating through most of the day, as investors grew nervous ahead of the upcoming first quarter earnings season.

The Asian markets have taken it on the chin this morning, with the Japanese shares down to six-month lows as an escalating selloff on Wall Street spread to Asia. Japan's Nikkei tumbled 2% or 298 points at 14,001. Singapore's Straits Times declined 0.4% or 15 points at 3,188. South Korea's Seoul Composite shed 0.9% or 17 points at 1,990. Taiwan's Taiwan Weighted fell 0.5% or 45 points at 8,902. China's Shanghai Composite was flat at 2,136 and Hong Kong's Hang Seng was flat at 23,175.

The VIX or volatility index has spiralled by 27% this week, which is possibly a portender of things to come. The rupee is weak in early trades, slipping by 25 paise at 60.32 per dollar versus 60.07 on Thursday.

In economy-related news, one would have to keep an eye on the index of industrial production (IIP) numbers for February, which are due later in the day.

The high-beta metal sector is having a rough ride this morning. Sesa Sterlite has shed 1.4% at Rs 195 to emerge as the top loser on the BSE and Hindalco has weakened by 1.2% at Rs 140.

The overnight weakness on Nasdaq has further rubbed onto the hitherto-underperforming IT sector this morning. Wipro has slipped by 1.1% at Rs 554, Infosys has shed 1% at Rs 3173 and TCS has lost 0.7% at Rs 2110.

The financials are also seeing profit-booking after the run-up in the recent past. HDFC has shed 1.2% at Rs 915, ICICI Bank has lost 0.8% at Rs 1235 and SBI has lost 0.2% at Rs 2022. The broader financials universe has also lost some sheen this morning. Indusind Bank has lost 1.6% at Rs 503 after the RBI said that FIIs shareholding in the bank has reached the trigger limit. Indian Bank has shed 1.7% at Rs 130 and INS Vysya Bank has slipped by 1.3% at Rs 603.

The high-beta counters such as the Adani Group are seeing some profit-booking post the blockbuster gains leading into the previous session. Adani Enterprises, which had sky-rocketed by more than 20% on Thursday, has slipped by 2.1% at Rs 460.

On the other hand, the pharma stocks have bucked the negative trend. Sun Pharma has gained 1.5% at Rs 625 and Cipla has added 1.3% at Rs 402 and Dr Reddy's has added 0.6% at Rs 2566.

Tata Motors is trading higher by 1.4% at Rs 438, also its record high on the BSE, after Jaguar and Land Rover (JLR), its British-based arm, registered a 2.7% year-on-year (yoy) growth in retail sales in March 2014; primarily due to sluggish off-take in old model.

 

Housing Development and Infrastructure (HDIL) is up 2% at Rs 77.20 after Credit Suisse (Singapore) bought over 2 million shares of the Mumbai-based real estate developer for Rs 16 crore through an open market transaction.

The market breadth is almost even. Out of 1837 stocks traded on the BSE, there are 955 advancing stocks as against 792 declines.