Sensex hovers around 26,400; defensive stocks in demand

Benchmark indices are trading flat with Sensex and Nifty hovering around 26,450 mark and 7,900 levels, respectively as losses in power and select metal shares capped gains in defensive stocks.

By 10:30, the Sensex was lower by 9 points at 26,427 mark and the Nifty slipped by 6 points at 7,900 mark.

The broader markets are also showing a mixed trend. Markets breadth in BSE remains neutral with 1,073 shares declining and 1,031 shares advancing.

Markets are likely to see a very volatile week as investors will remain cautious on account of expiry of August derivative contracts.

Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 127.33 crore on Monday, as per provisional data from the stock exchanges.

GLOBAL MARKETS

Asian shares inched higher on Tuesday as investors increasingly expect the European Central Bank to expand liquidity as soon as next week to boost the sagging euro zone economy - just as the U.S. Federal Reserve plans to end its bond-buying drive.

The euro slipped to a one-year low against the dollar as comments from ECB chief Mario Draghi late last week that the central bank was prepared to respond with all its "available" tools resonated in the market.

RUPEE

The rupee rose to 60.54 vs previous close of 60.5650/5750. Asian currencies inched up as investors expected the ECB to infuse liquidity.

SECTORS & STOCKS

BSE Power index has slumped by nearly 2% followed by counters like Oil & Gas, Capital Goods, Auto, Banks, Metal and Realty, all declining between 0.1-1%. However, defensive sectors like FMCG, Healthcare and IT are trading firm, all gaining between 0.5-1.2%.

Shares of power manufacturers are under pressure, falling by up to 5% on the Bombay Stock Exchange (BSE), after Supreme Court on Monday declared coal block allocations between 1993-2010 as illegal.

Tata Power, Adani Power, Reliance Power and Jaiprakash Power Ventures are down 3-5%, while CESC, Torrent Power, JSW Energy, NHPC, NTPC, JSW Energy and Reliance Infrastructure down between 1-2% on BSE.

Jindal Steel and Power (JSPL) has dipped 8% to Rs 233, extending its previous day’s fall, after Supreme Court (SC) on Monday declared that coal blocks allocated between 1993 and 2010 as illegal.

Main losers from the Sensex-30 pack are Tata Power, BHEL, ONGC, SBI, NTPC, L&T and Sesa Sterlite, all sipping between 1-4%.

On the gaining side, Sun Pharma, Tata Steel, Cipla, HUL, Dr Reddy’s and Bharti Airtel have gained between 1-2%.

TCS has gained nearly 1% after the company said it tied-up with US-based Cloudera to offer Big Data and analytics services globally.