Negative bias prevails; IT & capital goods plunge

The main losers on the Sensex at this hour include Bajaj Auto, Wipro, L&T, Infosys and ONGC

Benchmark indices continue to remain range-bound with negative bias weighed down by capital goods and IT shares.

By 10:30, the Sensex was lower by 27 points at 21,162 mark and the Nifty slipped by 16 points at 6,298 levels.

Adds Pritesh Mehta, Sr Technical Analyst, India Infoline, “Despite a major breakout at the start of the month, Nifty is unable to build on the gains. Current run up is lacking participation from the leadership stocks. Index is struggling to close above the previous breakout levels of 6,360 for three consecutive weeks now. In order to confirm trend reversal, Nifty needs to surpass and sustain above the congestion zone 6,300-6,350 where steady supply is visible.”

The market sentiment was boosted in early trades as data showing that foreign funds were net buyers of Indian stocks on Friday, 27 December 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 295.76 crore on Friday, 27 December 2013, as per provisional data from the stock exchanges.  

Shares will remain firm for most of the thinly-traded week ahead, as inflows from foreign institutional investors (FIIs) are expected to continue despite the US Federal Reserve starting to withdraw its stimulus programme from January 1.

Investors will watch the April-November fiscal deficit reading, due on Tuesday, and the manufacturing PMI (Purchasing Managers' Index) for December, due on Thursday, which will help them gain insights into the extent of the economic slowdown.

On the global front, Japan's Nikkei stock average hit a fresh six-year high on Monday, its final trading day for 2013, and is set to close the year up more than 55% to mark its biggest annual gain since 1972.

The Nikkei advanced 0.3% to 16,230.23 in mid-morning trade, on track for a ninth straight day of gains, which would be its longest winning streak since July 2009.

Japanese markets will be closed for the New Year holiday from December 31 to January 3, and will reopen on January 6.

Driven by Tokyo's aggressive fiscal and monetary stimulus to revive the world's third-largest economy, the benchmark Nikkei has rallied 56% this year.

Back home, the rupee was weaker in early trade tracking strength in dollar vs other currencies in Asia. It was trading at 61.95/96 versus its close of 61.85/86 on Friday.

On the sectoral front, BSE Capital Goods and IT indioces have plunged by nearly 1% each followed by counters like Realty, Power and Oil & Gas, all declining marginally. However, BSE Metal and Consumer Durables indices have gained marginally.

The main losers on the Sensex at this hour include Bajaj Auto, Wipro, L&T, Infosys and ONGC, all falling between 0.5-1%.

On the gaining side, Sesa Sterlite, Tata Motors, Coal India, Dr Reddy’s Lab and HUL gained between 1-2%.

Railway stocks are on a roll and trading higher by up to 7% on reports that the government may allow foreign direct investment (FDI) in railways.

Kalindee Rail Nirman, Titagarh Wagons, Texmaco Rail and Engineers, Hind Rectifiers, Kernax Microsystems and Stone India are up 3-7% on the Bombay Stock Exchange (BSE).

Claris Lifesciences has galloped 16% to Rs 229 in early morning deals on the Bombay Stock Exchange (BSE) on back of multiple block deals.

The broader markets are outperforming the benchmark indices- BSE Midcap and Smallcap indices are up marginally.

The market breadth in BSE remains positive with 971 shares advancing and 680 shares declining.