Markets under pressure; Nifty slips below 200-DMA

The midcap and smallcap indices have shed nearly two percent each.

The markets have surrendered their early gains and have slipped in the red due to losses in the pharma, capital goods, oil and gas, and IT space.

At 10.30 am, the Sensex is quoting at 27,295, lower by 142 points or 0.5% and the Nifty has slipped below its 200-DMA of 8250 and is now at 8,246, down 58 points. The midcap and smallcap indices are underperforming their largecap counterparts to register losses of nearly two percent each at 10,238 and 10,735 respectively.

The Sensex had dropped 1,004 points, or 3.53%, over the week to close at 27,437 and Nifty had declined by 300 points, or 3.49%, last week to settle at 8,305. The markets did open firm this morning, with the Sensex hitting an intra-day high of 27,567 at opening bell, but has been unable to sustain its early gains.

The markets are likely to be volatile ahead of the upcoming April derivatives expiry on Thursday. A two-day meeting of the Federal Open Market Committee (FOMC) to review US monetary policy is scheduled on 28-29 April 2015; investors would be keenly awaiting indication on the timing of the first increase in US interest rates in nearly a decade.

One would also have to closely watch the market mvements at current levels as a comprehensive breach of the 200-day moving average (DMA) could drag the Nifty to 8,000 on the downside.

Moreover, this would be a truncated trading week as financial markets will remain closed on May 1 (Friday).

RUPEE

The rupee declined in the early trade on Monday. It has opened lower by 14 paise at 63.70 per dollar against 63.56 Friday.

STOCKS AND SECTORS

All the sectoral indices are in the red, with pharma, capital goods, oil and gas, and IT sector ranking among the major losers this morning.

In the pharma space, Wockhardt, Aurobindo Pharma, Strides and Divi's Lab are down between 4% and 8% each.

In the capital goods space, BEML, Bharat Electronics and L&T have lost between 1% and 6% each.

In the oil space, BPCL, GAIL, Cairn, Oil India, and ONGC have shed between 1% and 2% each. RIL, is however trading flat at Rs 879.

In the IT space, Tech Mahindra, HCL Tech and Infosys have shed about a percent each.

The shares of mid and small-sized companies are under pressure with both the mid-cap and small-cap indices down 2% each on the bourses. The S&P BSE Small-cap index is down 2.5% or 283 points at 10,726, while CNX Small-cap index has dipped nearly 3% or 162 points at 5,366 compared to less than 1% each decline in the S&P BSE Sensex and CNX Nifty.

Symphony, Rolta India, Marico Kaya Enterprises, Titagarh Wagons, Cera Sanitaryware, Astra Microwave Products, VA Tech Wabag and Gujarat Gas Company from small-cap and United Breweries, Wockhardt, Aurobindo Pharma and Britannia Industries from mid-cap have fallen more than 5% each on the BSE. Most of these stocks have seen strong gains in the past one year.

Among individual stocks, Hero Moto Corp and SBI have lost between 1% and 2% each. And Infosys has extended its losses post Q4 numbers. The IT bellweather, which had lost more than 6% on Friday, is down by another 1% at Rs 1,964.

Kotak Mahindra Bank is trading flat at Rs 1,373, recovering 1.5% from its early morning lows on the NSE, after new shares issued by the private sector lender on amalgamation of ING Vysya Bank were permitted for trade from today.

Siemens is trading higher by 2% at Rs 1,255 on the NSE in early morning trade after reporting 83% year on year jump in its standalone net profit at Rs 162 crore for the quarter ended 31 March 2015 (Q2) due to a strong operating performance.

Pitti Laminations has surged by 8% to Rs 70 after the company reported robust March quarter earnings after net profit more than doubled to Rs 4.60 crore on the back of strong sales growth.

On the other hand, NTPC has jumped by more than 1.2% at Rs 152 to top the gainer's list on the BSE. Private banking major ICICI Bank and auto major Maruti Suzuki are trading up by around half a per cent each ahead of their March quarter earnings later today.

The market breath is weak; out of 2106 shares traded on the BSE, there are 461 advancing stocks as against 1579 declines.