Markets weak in a tight range, Nifty holds 7,800; Infosys falls 3%

Benchmark indices continue to trade lower in a tight range weighed down by index heavyweight Infosys. However, the downside is limited due to buying demand among select capital goods and power sectors.

At 11:10 am, the Sensex slipped 73 points to trade at 25,792 and the Nifty fell 20 points to trade at 7,817.

The broader markets are outperforming the benchmark indices- BSE Midcap and Smallcap indices are up 0.2-0.3%. Market breadth is firm with 1,198 shares advancing and 937 shares declining.

Meanwhile, foreign portfolio investors (FPIs) sold shares worth a net Rs 492.45 crore yesterday as per provisional data released by the stock exchanges.

In the currency front, the rupee depreciated by 14 paise to 66.17 against the dollar at the Interbank Foreign Exchange in early trade today on buying of the US currency by importers.

MOTILAL OSWAL MARKET OUTLOOK

The momentum indicator is gradually reversing from the lower extreme suggesting that there could be a temporary pullback. It is recommend to exit shorts once Nifty shows signs of revival on the absolute price scale above 7,870.

Upward shifts by Put writers and covering shorts indicate neutralization of bearish bias. Heavy congestion in 8,000 now on the higher side may pose a hurdle in case if the pullback has to continue.

GLOBAL MARKETS

An index of Asian shares fell on Wednesday as copper prices tumbled and another bomb scare in Europe hurt risk appetites, while bets that the Federal Reserve remains on track for a rate hike bolstered the dollar.

The greenback edged higher, close to seven-month highs against a basket of currencies as U.S. economic data also backed the case that the US central bank is poised to increase interest rates next month for the first time in nearly a decade.

The dollar's strength undermined dollar-denominated commodities, making them more expensive for holders of other currencies.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped about 0.2%.

Shanghai shares dropped 0.4% early but then changed course and were slightly up after data showing Chinese home prices rose for first time in over a year in October on an annual basis. That signalled a housing market stabilisation that could help re-energise the listless economy.

On Tuesday, Wall Street shares ceded earlier gains to end almost flat after news that German authorities called off a soccer game which German Chancellor Angel Merkel was due to attend, citing threats of bombing, sparking fears of another attack coming only days after the deadly assault in Paris.

SECTORS & STOCKS

BSE IT index has plunged by almost 1.5%. However, BSE Consumer Durables, Capital Goods and Power indices are up 0.7-1%.

The top losers from the Sensex pack are Infosys, Dr Reddy’s Labs, Hindalco, Vedanta and Tata Steel.

Infosys, India’s second largest information technology (IT) services company, is now looking at significantly improving its win rates of large deals, apart from increasing its employee utilisation rates, as part of its growth execution strategy in the medium term. Further, Infosys ADR was down almost 5% overnight. Shares of Infosys are down almost 3%.

Dr Reddy’s Laboratories said in a notice to BSE that it has closed Fondaparinux Intellectual property purchase and paid $17.5 million to Alchemia as deal consideration. The stock is down almost 2%.

Metal shares have extended losses due to fall in commodity prices across the globe. According to Reuters report, copper continued to suffer, hitting a 6-1/2-year low of $4,590 a tonne CMCU3, a decline of 27 percent year-to-date.  

On the gaining side, NTPC, Coal India, GAIL, Tata Motors and HUL are up 1-2%.

Among other shares, Dishman Pharmaceuticals and Chemicals is trading higher by 5% at Rs 341 on the NSE after the company has clarified that it has not received any warning from the United States Food and Drug Administration (USFDA) on Clovis issue.

Shares of aviation companies such as Jet Airways, InterGlobe Aviation and SpiceJet were trading lower on the BSE in early morning trade after the Competition Commission of India (CCI) in its final order passed on Tuesday imposed a fine totalling Rs 257.91 crore on the three carriers.

Among individual stocks, Jet Airways and SpiceJet dipped 4% each at Rs 410 and Rs 46.25 respectively, while InterGlobe Aviation, which operates IndiGo, was down 2% at Rs 1,015 on the BSE.

With Reuters input