Markets trading in a narrow range, Telecom shares drop

Benchmark indices remain volatile in a narrow range with negative bias prevailing on account of profit booking.

At 11:15 AM, the 30-share Sensex was down 20 points at 21,270 and the 50-share Nifty was down 1 points at 6,320.

Adss Kunal Bothra, Technical Analyst, LKP Securities, “we are nearing a resistance of 6350 levels on Nifty spot, and considerably the momentum is taking a beating there. Also the telecom stocks which are down today are adding that slight bit of pressure on the markets. Resistance for Nifty is at around 6350 levels with supports now trailed at 6280 levels.”

Foreign institutional investors (FIIs) bought shares worth a net Rs 713.29 crore on Wednesday, as per provisional data from the stock exchanges.

On the global front, the dollar rose to a one-week high against the yen on Thursday, as a set of robust US data and upbeat earnings from Bank of America helped offset concerns of a US slowdown following December's disappointing payroll numbers.

Japan's Nikkei benchmark advanced 0.5% in relatively active trade after logging its best one-day rise in four months on Wednesday, a day after suffering its worst session in five months.

Back home, the rupee is weaker at 61.65/66 versus its previous close of 61.54/55. The dollar has gained versus most other Asian peers in trade.

On the sectoral front, BSE Auto, TECk and FMCG indices have declined by nearly 1% each. However, BSE Capital Goods and Metal indices have gained by 1% each.

Shares of telecom companies are under pressure trading lower by up to 6% after analyst at foreign brokerage house Credit Suisse downgrades Ideal Cellular and Bharti Airtel citing reasons that Reliance-Jio joining spectrum auctions is a “negative surprise,” against market expectation.

Among the individual stocks, Idea Cellular has tanked over 6% to Rs 157, while Bharti Airtel and Reliance Communications are down 4% each at Rs 318 and Rs 122 respectively. Tata Communications too trading lower by 2.4% at Rs 297 on the Bombay Stock Exchange (BSE).

Other notable losers are Bharti Airtel, ONGC, Tata Motors, M&M, ITC and Sun Pharma, all dropping between 1-4%.

On the gaining side, Tata Steel, Sesa Sterlite, BHEL, Axis Bank and HDFC have gained between 1-2%.

Among other shares, Loveable Lingerie has surged 5% to Rs 320 after the foreign investors bought an additional nearly 2% stake of the company for Rs 10 crore from open market.

DCB Bank has rallied 6% to Rs 59.80 on the BSE after reporting a strong 33% year-on-year (yoy) jump in net profit at Rs 36 crore for the third quarter ended December 2013 (Q3) on back of higher interest income and improvement in net interest margin.

The market breadth in BSE remains marginally negative with 1,037 shares declining and 930 shares advancing.